Our good friend and BV consultant John Borrowman (Borrowman Baker LLP) recently received an inquiry from an overseas provider of “turn-key valuation and modeling services to CPA and valuation advisory firms.” The proffered services ranged from complete analyses, including exhibits and reports, to guideline company and transactions research for 409A engagements, FAS 157 (and 123R/141R/142), ESOPs, estate and gift tax, and “other requirements.” Are off-shore valuations inevitable? Silicon Valley VC firms may have started the trend, especially given their limited funds and the need to “pump out” 409A and 123R reports, Borrowman says.
While other accounting work is regularly sent offshore (the Big 4 apparently do quite a bit of this to save audit costs), few valuation engagements allow delegation—even when the staff are in the same office. Summarizing this reality, Borrowman emphasizes “business valuation is a business of judgment. The deliverable is, after all, referred to as an opinion. There has to be some limit to how much ‘cookie-cutter’ you can introduce into the process and still serve your client.” What’s your opinion? Email the editor with your comments and whether you’ve ever farmed out entry level assignments (or would consider outsourcing as an option), and we’ll continue the discussion next week.
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