"Don't succumb to the temptation to take on work for which you are not sufficiently competent to do," Bill Quackenbush (Advent Valuation) advised attendees at the ASA/CICVA Business Valuation conference in Miami. There are many ways to make errors on reports, one of which is mismatching your value inputs. Some of the mistakes he has seen in this area include using income returns and cash flow risks/multiples, pretax returns and after tax risks/multiples, and equity returns and invested capital risks.
"Know your valuation theory," he advised. "I often go back and read Pratt, Hitchner, Trugman and other professional works." And know your finance, accounting, statistics, and economic theory too, Quackenbush added. "I have a copy of Statistics without Tears on my shelf which I refer to. That book came before Statistics for Dummies," he laughed.
"Making errors not only destroys your credibility,"Quackenbush reminded the audience, "it also does your client a disservice and violates your professional obligations."