Questions to Ask a Prospective Business Appraiser
Posted on 03.04.16
How do you find an expert business appraiser?
One of best places to find an expert business appraiser is through a referral from a trusted professional who has actually worked with the appraiser or is familiar with his/her reputation. However, in the event you do not have the benefit of a direct referral, you may need to consider other sources such as member directories of valuation organizations.
Regardless of how you identify the expert business appraiser, you will still need to make sure the expert possesses the necessary professional qualifications and that his expertise matches the needs of your particular assignment.
In assessing the business appraiser’s qualifications, we suggest asking the following questions:
- Do you perform business appraisals on a full-time basis?
- How long have you been specializing in valuation?
- How many valuations have you performed?
- Do you have full-time staff who are trained and specialize in valuation? If so, how many?
- Are you a member of the following professional organizations:
- American Institute of CPAs - If so, have you earned the AICPA’s Accredited in Business Valuation (ABV) specialization designation?
- American Society of Appraisers - If so, have you earned the Accredited Senior Appraiser in Business Valuation (ASA) specialization designation?
- What continuing education have you taken to keep up-to-date in the field?
- Have you taught courses, conducted seminars, written articles, and/or published books on the subject of valuation?
- What specific experience do you have with the type of business I wish to have appraised?
- Do you have experience in conducting appraisals for the specific valuation purpose?
- How much time will you personally devote to my valuation project?
Do you have access to information services or databases such as:
- Standard & Poor’s Research Insight database for publicly traded companies
- Transaction databases for buys/sells of private companies
- Executive compensation databases
- Closed-end mutual fund database
- Real estate partnership database
- Do you have a dedicated valuation library?
- What type of computer software do you use for valuation projects? Is it an “off-the-shelf” package or a custom application specially designed for valuation? (“Off-the-shelf” packages are typically very simplistic and do not provide much flexibility).
Do you conduct your appraisal work and prepare your reports in accordance with the following standards:
- American Institute of Certified Public Accountants’ Statement on Standards for Valuation Services No. 1
- American Society of Appraisers’ Business Valuation Standards
- Uniform Standards of Professional Appraisal Practice (USPAP)
- What do you charge for your services and how do you base your fee?
- How long does it take for you to complete a project?
- Will you provide a list of references?
Source: American Society of Appraisers
Harold G. Martin, Jr., is the Partner-in-Charge of Keiter’s Valuation and Forensic Services Group. He is also a member of Keiter’s Executive Committee. He has over 30 years of experience and specializes in valuation and forensic accounting, including financial investigations and litigation consulting and expert witness services. He is a frequent speaker and writer on valuation topics. Read more of Harold’s insights on our blog.