Raymond Rath, Managing Director at Globalview Advisors, presented to the Arizona Society of Certified Public Accountants (ASCPAs) on the topic of the “Scope of Appraisal Review Procedures for Business Valuations”, on December 18, 2019.
Key elements of the presentation included:
Appraisal review procedures of valuations prepared for financial reporting are under increasing scrutiny by the Public Company Accounting Oversight Board (“PCAOB”) and the U.S. Securities and Exchange Commission (SEC).
The PCAOB is frequently finding deficiencies in the extent of review procedures performed for appraisal reviews performed for financial reporting.
Elements of an appraisal review can include:
- Confirming appropriateness of valuation with use;
- Confirming key facts and data presented;
- Confirming methodologies;
- Confirming assumptions;
- Checking math; and
- Expressing opinion on the value estimate.
The scope of procedures for a review can vary markedly. The scope of review procedures should be confirmed prior to the commencement of an appraisal review.
The scope of a review will be a function of the importance and use of the valuation estimate.
An appraisal review that consists of simply reading an appraisal report and providing comments would be of a very limited scope and may not be sufficient for the users of the review in many instances.
Globalview Advisors provides significant services to firms in the biotechnology sector at a range of different points in the firm lifecycle. Services include securities valuations for ASC 718, IRC 409A, estate and gift tax planning and reporting, business valuations for ASC 350 and other purposes and intellectual property valuations for ASC 805, ASC 360, transaction support and litigation purposes.
The Arizona Society of CPAs is Arizona’s leading professional CPA organization, with more than 5,200 members. Its mission is to enhance the success of its members and lead the profession through education, advocacy and image enhancement.