BVWire attended the recent annual business valuation conference of the New York State Society of CPAs (NYSSCPA) in New York City. It was an excellent conference, and here are a few takeaways:
- George Wilfert of the PCAOB said that there’s an increase in the number of audit deficiencies regarding auditors’ testing of fair value measurements associated with business combinations. He also mentioned that the standards for auditors’ use of specialists, such as valuation experts, will be changing.
- The DOL continues its crackdown on ESOP valuations it perceives as faulty, according to Thomas Leroe-Munoz and Daniel Schiffer, both part of the DOL’s ESOP enforcement efforts. The DOL/GreatBanc Fiduciary Process Agreement serves as overall valuation guidelines, but Leroe-Munoz told the audience that the agreement is “not a totality of all the requirements.”
- Daniel Van Vleet (Stout Risius Ross) revealed that the Van Vleet model (S corporation economic adjustment model) is being used for the first time in a U.S. Tax Court case, and by both the IRS and the taxpayer.
- Mark S. Gottlieb (Mark S. Gottlieb, CPA, PC) says his firm spends a good deal of time on an industry-specific review because it can be very meaningful in terms of drawing conclusions of value.
- More companies are performing preacquisition valuations, and experts are being called in earlier in the process, according to Raymond Weisner (Valuation Research Corp.). He also pointed out that 50% of clients’ acquisition models have material errors.
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