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By Eddie Blaugrund, CPA, CVA, CFE;
and
Elaine Rockwell, CPA, CVA
The potential candidate should also
possess other attributes, including experience, the
ability to communicate and teach and ethical
behavior. To find someone with experience, ask
questions and check references. The candidate may be
needed to provide other services including
identifying assets and liabilities, substantiating
income, tracing of funds, addressing tax issues and
assisting with settlement options and structures.
Given the inherent subjectivity in
all valuation jobs, it is preferable to engage a
practitioner who not only possesses the technical
knowledge, but one who also has the practical
experience in valuation engagements to make the
inevitable subjective decisions, but make them in an
independent, and non-biased manner.
If the appraiser is able to explain
the valuation process, such as what documents were
examined and utilized, what assumptions were made,
how the general economy and industry trends were
considered, how rules of thumb and market data were
applied, what discounts were used and why, among
other issues, it is easier for the parties to accept
and understand the process and conclusion.
Ethical behavior deserves equal
attention. Given the subjective nature of valuation,
there are many “appraisers” that will be more than
willing to advocate for their client to reach the
desired value conclusion. For instance, in a
domestic relations setting, there are “appraisers”
who will have different value conclusions depending
on whether they were hired by the business owner or
the non-owner spouse. This should never be the case.
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