Expert witness testimony

Litigation, regulation expected to add to forensic and valuation workload

Forensic and valuation CPAs expect increases in litigation and regulation to add to their workload and make it challenging to hire and keep qualified employees, according to a new AICPA survey. Attracting and retaining qualified staff led the list of top challenges over the next two to five years, identified

Handling of Litigation Contingency Disclosure Facing Greater SEC Scrutiny

The SEC appears to be increasing its scrutiny of compliance with financial statement disclosure rules regarding potential court losses. The heightened attention is intersecting with a three-decades-old treaty for lawyers and accountants forged by the AICPA and the American Bar Association. The JofA spoke with attorney Michael Young, chair of

Expert Testimony Guidelines for CPA Valuation Analysts

When giving expert testimony, CPA valuation analysts should be prepared to have their reports and testimony withstand the scrutiny of litigation and cross-examination. The following guidelines can help the valuation analyst prepare for potential vulnerabilities that opposing legal counsel may try to exploit. Check your resume. Opposing counsel typically investigates

Securities Class Action Filings Decline

Federal securities class action activity declined in the first half of 2009, according to a report released Monday by the Stanford Law School’s Securities Class Action Clearinghouse and Cornerstone Research. Eighty-seven federal securities class actions were filed in the first half of 2009, a 22.3% decline from the 112 filings

Privilege Claims Under Fire

Despite some legal setbacks, the IRS has signaled it will continue to press for a strict reading of the work product privilege that protects taxpayer documents from discovery. With Action on Decision 2007-004, the IRS said it will not acquiesce in the Sixth Circuit’s holding in U.S. v. Roxworthy that

Wading Into Litigation Support

EXECUTIVE SUMMARY CPAs can provide valuable services as litigation support consultants in lawsuits involving business damages. This analytical role allows CPAs to enter the litigation support business before taking on the greater challenge of being an expert witness. Before accepting an engagement, the CPA should ask the attorney for all

Highlights

HIGHLIGHTS With FASB affirming its implementation date for FIN 48, several organizations, including the AICPA and FASB itself, are producing educational materials or additional guidance to help issuers comply with its new requirements for recognizing and measuring tax assets and liabilities. FASB Interpretation no. 48, Accounting for Uncertainty in Income

Highlights

The PCAOB proposed a standard, An Audit of Internal Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements, to replace PCAOB Audit Standard no. 2 (AS2). The proposal is designed to focus audits on the matters most significant to internal control, eliminate unnecessary procedures, simplify the

Highlights

HIGHLIGHTS The SEC enhanced the Internet-based search capability of its EDGAR database of company filings. Users now can search the contents of disclosure documents with a full-text search tool. The newly searchable information includes registration statements, annual and quarterly reports and other filings by companies and mutual funds during the

Collaborative Divorce: Better for Everyone

When it comes to divorce, emotions and the desire to be litigious often run high. The toll on a divorcing family is both emotional and financial—and it can be devastating to both children and parents. An alternative to litigation in family breakups is called “collaborative divorce,” a process begun by

Alternative Dispute Resolution: Collaborative Law Works

Is having an opponent our way of life? Is litigation an efficient and responsible means of resolving disagreements? Is advocating for a client, to the detriment of the “other” side, acceptable? Or, is there a recipe for peaceful resolution of differences? What if the disagreeing parties agree to engage in

BV Engagement Research

Gathering data is a key element of a business valuation analysis—and you must assemble enough to analyze your subject company from all sides. Client data. Once you’ve gathered the audits, the tax returns, the business descriptions and marketing materials, you will realize—with apologies to Joni Mitchell—that “you’ve looked at the

Commitments to Private Equity

Note : Includes venture capital, LBO, mezzanine, turnaround and recapitalization-focused funds. Source: Thomson Venture Economics/National Venture Capital Association; Goldman Sachs for 2005 buyout data. Determining fair value requires managers to exercise judgment. While each manager’s judgment may result in different but supportable views on valuation, using common guidelines consistent with

Fair Value: Challenges to the Private Equity Industry

The private equity (PE) market (including venture capital, buy-out, mezzanine and similar longer-term, illiquid investments) has expanded exponentially over the past 10 years. U.S. GAAP requires private equity (PE) investments be stated at fair value. Given the nuances inherent in PE, there can be significant challenges in determining the fair

Tips for Starting a BV Practice

Business valuation is not an area of accounting to be entered into lightly. Statistics show there are many litigation claims against CPAs in the valuation area, mostly due to a misunderstanding of what services the CPA was to perform as part of the engagement and the CPA’s lack of formal

The Valuation Landscape

Business valuation is a relatively new discipline. Financial valuation—the process of determining the value of a financial asset or liability—belonged first to those on Wall Street who focused on trading securities; the concept of business valuation, or valuing private companies, arrived on Main Street about 25 years ago by entering

Discovery: Retrieving Electronic Documents

Electronic evidence often can provide vital information about the activities, motives and intent of individuals and businesses. Electronic documents thought to be deleted or lost by the user often can be recovered. In the case of electronic mail, casual and candid correspondence may be frozen in time. Additionally, the background

Fraud: Small Business Clients at Risk

Small businesses are the most vulnerable to occupational fraud and abuse and suffer disproportionately larger losses as a result, according to the 2004 “Report to the Nation on Occupational Fraud and Abuse” prepared by the Association of Certified Fraud Examiners. Compounding the problem, small businesses are less likely to have

The BV/FLS Environment

The following articles highlight the diverse issues facing practitioners in the business valuation and forensic & litigation services (BV/FLS) areas. The wide range of topics—fair value, collaborative process in divorce and valuation, electronic discovery and fraud—underscore the complexity of this rapidly growing practice area.

Fraud: "Elementary, My Dear Watson"

The founder and chairman of the Association of Certified Fraud Examiners, Joseph Wells, wrote an insightful series, The Fraud Beat, for the JofA on the basics of fraud investigation in small businesses. “Sherlock Holmes, CPA,” ( www.aicpa.org/pubs/jofa/aug2003/wells.htm and www.aicpa.org/pubs/jofa/sep2003/wells.htm ) explains what it takes to gather evidence, interview witnesses and

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.