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 the valuation expert’s resume or curriculum vitae. Make sure that the information contained in the resume is current and that it does not contain any misstatements.


 Anticipate questions. Opposing counsel will review the valuation analyst’s prior testimony and published writings. Be prepared for questions concerning any prior statements that appear to be inconsistent with the current opinion.


 Consider your relationship with the adverse party. Valuation analysts should have no confidential relationship with the adverse party. Determine whether you were ever contacted by the adverse party in connection with the subject case.


 Be knowledgeable about the facts. Courts typically find the opinions of even a highly qualified expert to be unpersuasive when the expert is not familiar with the specific facts of the subject case.


 Be prepared for the deposition. Expect the following deposition questions: Have you reached any opinions or conclusions not contained in your report? Have you been asked to form any other opinions? Do you plan to offer any other opinions? What additional work, if any, do you plan to perform related to this case? (The expert testimony may be excluded if the adverse party shows that the valuation analyst was not prepared to state his or her opinion at the deposition.)


 Understand the valuation analysis and how to perform the calculations in that analysis. Prepare for the following questions: Did you write the entire report yourself? Did anyone assist you? Does the report include any text that was written by your assistants? Does the report include any analysis that was performed by your assistants?


 Understand the requirements of Federal Rule of Civil Procedure 26(a)(2). The rule governs the report contents and when the expert report should be completed and delivered to the client’s legal counsel. A valuation expert’s report may be excluded if these discovery rules are not followed.


 Be sufficiently versed on the information in the expert report. The report should include a list of the documents and testimony that the expert reviewed. You should be able to explain why you selected the information that formed the basis of the expert opinion.


 Learn everything possible about the opposing expert’s position. While there are some situations where expert reports are not exchanged until the trial, valuation analysts will typically have access to the opposing expert’s report. In addition, you should ask for the workpapers that support the opposing expert’s analysis and conclusion.


 Will the expert opinion make sense to a layperson? Even if the valuation analysis is 100% correct, it may not be persuasive to a finder of fact if it is not understandable to a layperson.


—By Robert Reilly, CPA/ABV/CFF, ( a managing director in the Chicago office of Willamette Management Associates, a valuation consulting, economic analysis, and financial advisory services firm.


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