Impacts of competency of valuers on accuracy of fair value for financial reporting purpose

This study aims at exploring how Competency of Valuers (CV) impacts the accuracy of Fair Value (FV) assessments for financial reporting. With an emphasis on experience and qualifications, the study stives to fill in current research gaps by investigating the relationship between CV (independent variable) and accuracy of FV (dependent variable). It employed a mixed method approach, combining a pilot survey of five scaled questioner, administered to a randomly selected sample of 50 chartered valuers and accountants in Sri Lanka with a comprehensive literature review, then a quantitative analysis performed by SPSS utilizing Pearson’s correlation and Regression analysis. The findings shows that there is a moderate positive but significant (p-value = 0.002), relationship between CV and accuracy of FV with correlation coefficient of 0.422 and it indicates that FV accuracy increases in line with increase of CV. Regression analysis also shows that a one unit increase in CV results in a 44.2% increase in accuracy of FV, with CV explains 17.8% (R2=0.178) of the variance in accuracy of FV. Further, qualitative insights emphasize how crucial it is to use qualified, competent and experienced valuers so as to ensure the accuracy of FV assessments. Hence, the study recommends establishing criteria for qualification and experience required for Valuers, emphasizing continues professional development, investing in valuer education and training, encouraging quality assurance mechanism, and fostering ethical practices in FV assessments. Notwithstanding offering insightful conclusion, the study experienced limitation pertaining to timing, geographic scope, sample size and composition. To improve the accuracy of FV assessment for financial reporting, further research is recommended in the subject area.