A Profession at an Inflection Point: Implications of Organizational-Professional Conflict among Valuation Service Providers

Date
2019-08-28
Authors
Mason, Stephani
Barr-Pulliam, Dereck
Sanderson, Kerri-Ann
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Abstract
In this study, whether a valuation-specific professional ideology exists and, if so, the consequences of valuation service providers’ (specialists, hereafter) association with that ideology. We specifically explore whether the alignment of specialists’ professional and organizational identities result in an identity conflict that we specify as organizational-professional conflict (OPC). Using a survey of 222 specialists with extensive valuation experience and who represent a cross-section of sub-specialties, organizational structures, and career paths to valuation, we identified four primary findings. First, consistent with our expectations, we find that OPC is highest (lowest) when specialists’ professional and organizational identities are both low (high) due to an identity conflict. Second, we find that specialists employed by private and public companies reported significantly higher OPC relative to specialists employed by either accounting or independent valuation firms. Third, we find that specialists who report lower versus higher professional identities and who primarily value financial instruments also reported significantly higher perceptions of OPC. We find no difference in professional attitudes among specialists who primarily value non-financial instruments. Lastly, supplemental analyses show that our professional ideology measure is robust to alternative specifications; that specialists who experience higher OPC were associated with more negative job outcomes such as higher turnover intentions; and that specialists at higher ranks reported lower OPC. Our study includes a discussion on implications of these findings for audit and financial reporting quality and should be of broad interest to specialists, auditors, financial statement preparers, regulators, and standards setters.
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valuation specialists, fair value measurements, professionalism, organizational-professional conflict
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