Developing a SMART Framework for Financial Valuation of Private and Public Companies: An Applied Comparative Study for Reforming the Egyptian Standards

Abstract

Purpose and Design : This paper develops and empirically validates a SMART-based SEFVF framework to reform Egypt’s existing financial valuation standards (EFVS). Using a mixed-method approach that combines quantitative analysis and embedded case studies, the study benchmarks SEFVF against IVS and IFRS. The results show that the proposed SEFVF substantially improves valuation accuracy, transparency, and ethical consistency, reducing disputes compared to current practices. Method and Approach : “We analyze a stratified sample of 50 Egyptian listed and large unlisted firms and conduct six embedded case studies to examine implementation frictions”. We benchmark the proposed SMART-based SEFVF against IVS/IFRS requirements and Egypt’s EFVS. Quantitatively, we build composite indices (e.g., Transparency, Ethical-Compliance) and estimate a confirmatory SEM to test the causal links among SEFVF adoption, valuation accuracy, and reporting quality. Comparative benchmarking is performed against International Valuation Standards (IVS) and IFRS guidance, while Structural Equation Modeling (SEM) and scenario analysis test the hypotheses and framework validity. Findings : The results reveal that the SMART-based framework significantly improves valuation accuracy, reduces variation among valuers, enhances compliance with international standards, and increases stakeholder confidence in reported values. Case studies demonstrate that applying SMART principles leads to better risk management, fairer asset pricing, and improved decision-making in privatization, mergers, and capital market transactions. SEFVF is associated with significantly higher valuation accuracy and report transparency relative to EFVS; results are robust in the SEM (standardized paths > 0.30, p < 0.01). Originality and Value : This study is the first in Egypt to propose a comprehensive SMART framework for valuation reform, combining advanced digital tools, international benchmarking, and applied evidence from local case studies. It provides both academic and policy contributions by linking theory with practice. Theoretical Practical and Social Implications : Theoretically, it extends asset valuation theory by embedding SMART criteria. Practically, it equips regulators, auditors, and valuers with a structured methodology for consistent valuation. Socially, it contributes to protecting public wealth, reducing corruption opportunities, and fostering investor trust in Egypt’s financial markets .