Have you ever accepted a
time-sensitive business valuation project then
spent many late nights finishing the engagement?
These suggestions may help your effectiveness:
Assess the risks.
Time-sensitive engagements tend to
elevate risks. Make sure the project is worth the
risks that will be assumed to complete it and that
the compensation will adequately reward the
Determine the “critical path” to
completing the project. Prepare
a breakdown of all the activities that are
required to finish the project on time. Evaluate
the probability of obtaining required and
requested details in a timely and organized manner
Ensure that trained staff are available
for the project. The acceptance
or rejection of an engagement should depend on the
availability of trained and competent personnel.
Delegate various aspects of the project to share
responsibility and avoid putting any single person
at sole risk. Set realistic expectations for the
individuals assigned to the task.
Communicate with your client.
Communication skills are vital to
the engagement and negotiation process. Ask as
many questions as necessary to ensure both you and
the client have a solid understanding of the
project’s expectations and job requirements.
Create an understanding that procedures require
analysis and research prior to any management
Deal with time and scope limitations.
Time considerations may lead to an
engagement with scope restrictions or limitations.
(Scope restrictions or limitations should be
appropriately disclosed and fit the client’s
needs.) Effective time-management activities might
include (1) conducting interviews with management
or others by conference calls instead of site
visits or (2) communicating via e-mail to gather
required information and to keep the communication
lines open with the client(s). Document scope
restrictions or limitations with the following
Perform a summary valuation report
instead of a full detailed valuation report, when
appropriate and when this type of report clearly
fits the client’s needs.
Perform a calculation report, when
appropriate and when this type of engagement
clearly fits the client’s needs.
details on summary valuations and calculation
reports, see “
Professional Guidance in Business Valuation:
Applying SSVS1,” page 33.)
Define the engagement in writing.
Negotiations involve some form of
collaboration, confrontation or compromise.
Provide a written understanding of the engagement
that details the project’s criteria, objectives
and fees to assure shared responsibility with the
client(s). Set reasonable deadlines to facilitate
engagement, and state that delivery of a final
work product depends upon receiving required
information. Document that changes in engagement
facts, circumstances or understanding could delay
or impair your ability to continue a project.
Where appropriate, an additional retainer and
extension of time to complete may be required.
Require a signed representation letter for
accuracy and reliability of the provided
Estimate fees based on knowledge and
understanding of the explained facts and
circumstances as of the engagement letter
date. Inform the client of
billings as progress is made if time or fees
necessary to complete the project cannot be
estimated. Document within the engagement letter
that a fee statement will be provided and that
outstanding fees must be paid prior to delivery of
the project or issuance of a report and/or
testimony. Reserve the sole right to withdraw from
the engagement for non-payment.
Be mindful of Murphy’s Law.
Expect glitches and delays and build
allowances into the planning process.
Larry R. Cook , CPA/ABV, CBA,
president of Larry R. Cook &