News Source: RSI & Associates Inc.
CORPUS CHRISTI, Texas, June 10, 2025 (SEND2PRESS NEWSWIRE) — RSI & Associates, Inc., a leading provider of business valuation, feasibility studies and consulting services, today announced a policy of limited and careful application of Artificial Intelligence (AI) in the preparation and analysis of business valuations. This decision is driven by the firm’s commitment to maintaining the highest standards of accuracy, reliability, and ethical conduct in its valuation practice, particularly in light of current legal, regulatory, and ethical uncertainties surrounding the use of AI in financial analysis.
Image caption: RSI & Associates, Inc.
While recognizing the potential of AI to enhance certain aspects of business valuation, RSI & Associates acknowledges the inherent risks and limitations associated with AI’s current state of development.
These include concerns about:
- Data Bias and Accuracy: AI algorithms are trained on historical data, which often contain embedded biases that can compromise the objectivity and reliability of valuation outcomes.
- Challenge for Review and Validation: When a valuation is based on an AI model that is not easily understood, it becomes difficult for stakeholders to thoroughly review and validate the assumptions, data, and methodology used. This can lead to a lack of trust in the valuation outcome and potentially render the valuations indefensible.
- Defensibility Issues: In legal, lending, and financial settings, business valuations often require demonstrating the logic behind the business valuation process. The “black box” nature in AI models, referring to their lack of transparency, presents a significant challenge, making it difficult to explain how conclusions are reached. If the underlying assumptions and methodology are not clearly articulated and authenticated, parties may challenge the validity of the report’s findings. All too often this concern occurs after a transaction, acquisition or project funding. This is referred to as a ‘post-closing dispute,’ which frequently involves the initiation of legal proceedings.
- Evolving Regulatory Landscape:The legal and regulatory framework governing the use of AI in business valuation services is still under development, creating uncertainty, potential compliance risks and legal exposure to both the appraiser and the client. One of the biggest challenges to the use of AI is that of “hallucinations,” where systems produce incorrect or fabricated information. These errors can range from subtle inaccuracies to outright fabrications, often delivered with a high level of confidence, making them difficult to detect. Legal cases related to the fraudulent and irresponsible use of AI are too numerous to list, as the legal landscape on this matter is still evolving. Needless to say, “The jury is still out.”
- Expert Judgment Remains Crucial: While AI can assist with valuation process, expert judgment is still essential. Professional analysts must provide context, interpret the AI’s output, and ensure that the valuation is supportable, accurate and adheres to professional standards.
RSI & Associates emphasizes that the core of its business valuation methodology will continue to rely on the expertise and professional judgment of its accredited valuation analysts. These professionals possess the critical thinking skills and industry knowledge necessary to interpret complex data, identify nuanced value drivers, and provide well-supported, defensible valuation opinions. This human element represents the “Art” aspect of Business Valuations.
According to Gerald W. Brown, Sr, President and Senior Business Appraiser at RSI & Associates, “Accurate and reliable valuations depend on the expertise of the appraiser, as the integrity of the valuations must be a priority. Valuations, whether of a company’s stock or from an asset sale perspective, rely on both ‘science’ and ‘art.’ AI can certainly assist with the scientific aspects by processing large datasets and applying algorithms. However, it cannot replace the ‘Art’ demonstrated through human judgment, stakeholder interaction, subjective assessment and qualitative analysis, which are all crucial for a defensible outcome of a certified valuation.”
About RSI:
Founded in 1993, RSI & Associates, Inc. has provided business valuation, feasibility studies, exit planning and consulting services for over 30 years. RSI & Associates serves clients across the United States, in diverse industries, offering comprehensive and objective valuation opinions for a wide range of purposes. RSI & Associates, Inc. is committed to maintaining the highest standards of integrity, professionalism, and client service in every engagement.
Learn more at: https://rsivalue.com/
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