Aipedia: Accountants

AI-assisted business valuations

Aipedia, by the Apex broking team · Last reviewed 2026-10-27

Accountants can use AI to gather comparables and build valuation models, but they must be able to explain and defend every input. Valuations are contested by design, so unexplained AI-derived figures are a weak point in any later claim.

Part of: AI in Accountants

In short

AI tools can collect comparable transactions, extract data from accounts and build discounted cash flow or multiples models quickly. In share sales, divorce and shareholder disputes, the valuation is likely to be challenged by the other side, and the accountant may need to justify inputs in a report or in court. The ethics Code requires competence with the technology, recognition of data limits (300.6 A2), a judgement on whether output is appropriate (R320.11) and an explanation of limitations (R113.3). Valuation claims can be large, so PI limits, aggregation and engagement terms all matter.

How accountants use AI in valuations

Valuation work involves gathering data, choosing a method and exercising judgement. AI tools now help with the first two: searching for comparable transactions and listed company multiples, extracting normalised earnings from several years of accounts, drafting the narrative and running sensitivity analysis. A generative AI chatbot may be used to summarise market conditions in a sector.

Valuations for share sales, divorce, shareholder disputes and tax purposes are often read by someone motivated to attack them. Every input needs a source and a reason. A tool that produces a polished range in minutes can make the work look more certain than it is, and the speed can hide the judgement calls a valuer would normally make deliberately: which earnings to normalise, which transactions are truly comparable, and what discount fits the size and rights of the holding.

The duties that apply

113.1 A3 of the IESBA technology revisions: competence includes understanding the technology used.
300.6 A2: the data available might not be sufficient for the technology, for example thin comparable data for a niche business.
R320.11: decide whether AI output, such as a selected set of comparables, is appropriate for the purpose.
R113.3: explain the limitations of the valuation.
IESBA staff guidance (August 2026), which is non-authoritative, highlights opacity and non-determinism as AI characteristics that matter for accountants: a tool that cannot show its workings, or gives different answers on different runs, is hard to defend. ACCA's 2026 ethics report names explainability as a pressure point.

What can go wrong

Illustrative scenario: an accountant values a minority shareholding for a shareholder dispute. An AI tool selects comparables and suggests a multiple. Some comparables are from a different sub-sector and one includes a distressed sale. The valuation goes into the negotiation and the shares change hands. The selling shareholder's new adviser later challenges the comparables, and the accountant cannot explain how the tool chose them.

Other risks include AI-extracted figures that misread exceptional items, a model that applies a discount without a reasoned basis, and narrative about market conditions that is out of date.

Where the valuation is for court proceedings, an expert must be able to explain their opinion under cross-examination. Answers such as "the software selected them" are unlikely to satisfy a judge and may damage the expert's credibility on other points too.

How PI usually responds

Valuation negligence claims usually fall within an accountant's civil liability PI, subject to the terms, and claims are often assessed by asking whether the valuation fell outside a range a competent valuer could reach. Insurers commonly ask about the proportion of fee income from valuation work and the purposes of valuations. Claims connected with transactions can be large, so check how much PI cover you need. Where the other side or a buyer relied on the valuation, duty of care is the first question; see Caparo for accountants. Engagement terms matter too; see engagement letters and liability caps.

Practical controls

Record the source of every comparable and why it was kept or rejected.
Re-perform key AI-extracted figures from the accounts.
Avoid tools that cannot show how they reached an output for contested work.
State the method, the main assumptions and the limitations in the report.
Link the valuation to any AI cash flow forecast it uses and to due diligence findings.

How Apex helps

Apex arranges PI for accountants who carry out valuations, and a broker can make sure valuation work is properly declared. See the accountancy AI overview and whether PI covers AI mistakes.

Sources

Frequently asked

Can I use AI to select comparables for a valuation?

Yes, as a research aid, but you need to review each comparable, record why it is relevant and be able to explain the selection. The Code requires a judgement on whether technology output is appropriate before you rely on it.

Why does explainability matter in valuation work?

Valuations in disputes and transactions are challenged by the other side. If you cannot explain how an input was chosen, the valuation is weaker and harder to defend in negotiation, in court or in a later negligence claim.

Should a valuation report say that AI was used?

It is good practice to explain the method and sources, including any tools that selected data or built the model, together with the limitations. R113.3 requires limitations to be explained, and the CCAB draft Statement favours telling clients how AI is used.

Do PI insurers treat valuation work differently?

Many insurers ask how much fee income comes from valuations and what they are for, because transaction and dispute valuations can produce large claims. Declare the work accurately and check that your limit fits the size of the deals.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.