Certified Valuation Analyst (CVA) Practice Exam

In litigation-related engagements, what determines the applicable reporting standards for a valuation analyst's written report?

1. Industry Regulations Alone

2. The agreement between the client(s) and the analyst

3. Standard Valuation Guidelines

4. State Laws and Regulations

The correct answer is: The agreement between the client(s) and the analyst

The choice indicating that the agreement between the client(s) and the analyst determines the applicable reporting standards for a valuation analyst's written report is correct. This is because, in litigation-related engagements, the specific reporting requirements often arise from the expectations and agreements made between the parties involved. While various standards and guidelines exist, such as industry regulations or state laws, the contractual agreement established prior to the engagement takes precedence. It allows the parties to outline their expectations for the report, including the level of detail, the standards to be followed, and any specific legal requirements that may pertain to the engagement. Understanding that the agreement between client and analyst sets the stage for the engagement is critical. It emphasizes the collaborative nature of the valuation process, where clarity on expectations helps guide the format and content of the report produced.