Certified Valuation Analyst (CVA) Practice Exam

Is it true that only audited statements can be used in a valuation?

1. True

2. False

3. Depends on the situation

4. Not specified

The correct answer is: False

In the context of valuation, it is not solely dependent on audited financial statements; a variety of financial statements may be considered. While audited statements provide a high level of assurance regarding their accuracy due to the external review by independent auditors, valuations can also utilize compiled or reviewed financial statements, as well as management-prepared statements. Each type of financial statement offers different levels of reliability, and the choice of which to use often depends on the context of the valuation and the specific needs of the valuation analyst or stakeholder involved. Furthermore, in certain situations, supplementary information and data can fulfill requirements for a thorough and accurate valuation, even if those statements are not audited. Therefore, the assertion that only audited statements can be used is incorrect; a broader perspective regarding the use of various financial documents is essential for effective valuation practice.