Article Oversimplifies Becoming a BV Expert


I realize that it’s important to keep the pipeline full of younger CPAs who may develop an interest in the business valuation profession. Some of my colleagues have perceived a definite “aging” among BV’ers, with seemingly fewer younger members picking up the challenge. So I applaud the goal of attempting to attract new interest to the profession in “Breaking Into Business Valuation” (March 10, page 43). (I presume that was one goal of this article.)


But my read of the article was quite different. It presents a significant oversimplification of the process of becoming qualified to do valuations that uphold the high standards that most of us have worked hard to develop over the years. It is especially appalling that you are encouraging them to cut their fees as a way to “buy in” to the marketplace.


This does no good for any of us. It creates an adverse market expectation for all of us! The professional colleagues that I know have all worked hard to educate clients on the value of a high-quality valuation report prepared in accordance with professional standards and that the result justifies our fees.


Somewhere along the way, I was taught to work hard, do your best professional work, be proud of it, and therefore don’t be afraid to bill for it! There are already many competitive pressures that work to keep our fees down; we don’t need more competition from poorly qualified, likely yet-to-be-credentialed CPAs who are deep-discounting fees as a way to buy into an engagement.


Giving away what’s more likely to be a substandard report for a discounted fee does nothing to help us all enhance the reputation of the profession. Let’s do a better service to the membership community, valuators and all the other members by publishing meaningful articles with substantive discussions of key topics that truly educate. Educate not just valuators, but also the nonvaluators that need to understand that this is a complex area and worthy of bringing in qualified professional valuators to service their clientele for a fair and justified fee. The AICPA membership includes many very talented valuators; please use them to improve the resources offered to all the members.


Wayne E. “Nick” Nichols, CPA, CVA

Chestnut Hill, Mass.


Author’s reply: Thank you for your feedback on my article. While my intention was not to give advice on how to set fees, upon re-reading the article I can see how my choice of words leads to the conclusion that I did. The AICPA does not, and should not, suggest what members should charge their clients. This is a decision made by the firm based on market conditions, and I should have been more precise in how I made my point concerning fees.


I was trying to convey that a less experienced valuation preparer would be focusing on smaller, simpler valuations. Because these engagements would involve less work and risk, the fee structure would be adjusted accordingly. The bullet in no way should indicate to underbid another firm for that service. The use of the term “market rates” was a poor choice of words, and it should have been worded as above to more accurately reflect my meaning.


The article in no way meant to imply that a member should take on engagements for which he or she had not taken the necessary education to do the work competently. Members are required under Rule 201.01A of the AICPA Code of Professional Conduct to “Undertake only those professional services that the member or the member’s firm can reasonably expect to be completed with professional competence.” The assumption was made that a member had taken the necessary steps to get the education he or she would need to perform a business valuation and was now trying to determine the best method to gain experience and start a valuation niche.


Finally, as noted previously in the article, someone starting out in valuation should consult with a valuation expert to ensure his or her report complies with applicable standards and is a quality work product. This would lessen the firm’s profitability on that particular engagement but give the firm the valuable experience and assurance of quality by a consultant for final review. It takes years to become an expert in valuation, but this does not preclude a less experienced practitioner from doing valuation engagements.


Member feedback is important to the AICPA, and we appreciate that you took the time to respond and share your concerns with us.


Eddy Parker, CPA

AICPA Technical Manager, Forensic and Valuation Services



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