Many States Require CPAs Practicing Forensic Accounting to Now be Licensed as Private Investigators. The AICPA Provides an Online Guide. Jeff Drew at the Journal of Accountancy reports that the AICPA has made available to members an online guide detailing which states and cities require CPAs practicing forensic accounting to be licensed as a private investigator. Here’s more detail:
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Estate of Elkins Included Works by Picasso, Jackson Pollock, Henry Moore, Paul Cezanne, and Jasper Johns Roger Russell at Accounting Today reports that in the case, Estate of Elkins, 140 TC No. 5, the court applied Section 2703(a)(2) of the Tax Code in valuing the art, which included works by Picasso, Jackson Pollock, Henry Moore, Paul Cezanne, and Jasper Johns. Section 2703(a)(2) of the Tax Code provides that the value of any property should be determined without regard to any restriction on the right to sell or use the property. The IRS Commissioner claimed an estate tax deficiency in excess of $9…
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70 Percent of the Work Appraisers Did at Landsafe, Bank of America’s Appraisal Division, Was Related to Soured Home Loans Bank of America Corp.’s appraisal division LandSafe reduced about 5% of its work force, beginning Feb. 22, Bloomberg News, The Appraisal Institute, and Housing Wire reported. LandSafe had more than 1,000 employees, the report said. Hugh Son at Bloomberg explains a bit about the move:
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Based in Florida and Employing 600 Personnel in 59 Offices, New Company Is Third Largest Firm Providing Commercial Real Estate Valuation Advisory Services Forty-two independent CRE appraisal companies, with a total of 59 offices and 145 MAIs, have merged to form Valbridge Property Advisors (www.valbridge.com), Commercial Property Executive reports. The new company, headquartered in Naples, Fla., will rank in terms of size behind only Integra Realty Resources and CBRE among companies providing CRE valuation and advisory services. Here’s more:
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Tax Crackdown Comes as Use of Contract Workers Grows; Companies Find Rules Unclear Angus Loten and Emily Maltby at the Wall Street Journal report that some studies have shown that local businesses misclassify anywhere from 10% to more than 60% of their workers as independent contractors, and regulators are beginning to crack down in pursuit of more revenue. An excerpt:
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Top 100 Firms in 2012 Also See Big Jump in Demand for Attest Services, Cash-Flow Forecasting and Management Accounting Today reports in its latest iteration of Top 100 Accounting Firms that the top two fastest-growing niches in accounting services are now international tax services and state and local tax services, edging out business valuation, last year’s fastest-growing niche. Danielle Lee reports (free registration required):
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Case Studies, Strategies for Detecting Fraud, and a Framework for Prevention Corporate governance legislation has become increasingly concerned with the ongoing resilience of organizations, and, particularly, with their ability to resist corporate fraud from the lowest levels to the upper echelons of corporate management. These titles offer both case studies on recent fraud cases as well as guidance for strategies on fraud detection and prevention.
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Both Buyers and Sellers Should Follow a Careful Process to Realize a Successful Transaction. Here are Some Tips A successful business sale will ideally leave both the buyer and seller feeling the transaction was a success. Charles Andrews recaps questions that he asks sellers before accepting an engagement as a transaction advisor and lists ten steps defining a business sale process most likely to satisfy both buyer and seller.
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Choosing an Appropriate Weighted Average Cost of Capital Definition Sometimes Depends On Context Valuation principles generally hold that the value of a business is largely a function of return on invested capital and growth, writes J. Richard Claywell, since these are the primary drivers of free cash flow. But how does this cash flow relate to the asset and liability values on the balance sheet?
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Judge Cuts Apple Award Versus Samsung, Sets New Damages Trial Poornima Gupta and Erin Smith report at Reuters report that Apple Inc had a major setback in its mobile patents battle with Samsung Electronics. On Friday, March 1st, a federal judge slashed a $1.05 billion jury award by more than 40 percent and set a new trial to determine damages. Here’s more:
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Statistical Confidence Can Help Pinpoint Value. Many questions have arisen concerning the reliability of valuations using the Direct Market Data Method (DMDM). Rand Curtiss shows how to use statistical techniques to answer them with confidence.
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Unreported Income Can Be Detected By Direct and Indirect Methods; Indirect Methods Examine Cash Inflows and Outflows. Here’s How. Joe Epps, CPA/CFF/ABV, CFE, CVA, explains how a forensic accountant goes about searching for unreported income—a commonly required practice in divorce and bankruptcy cases, contract disputes, and fraud investigations. The direct method is simply reviewing financial statements for the information they provide and taking it at face value. But there are also indirect methods: One indirect method of searching for unreported income is to compare all identifiable cash sources (cash inflows) and all identifiable cash uses (cash outflows). Find out more.
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Why Estate Planners Need to Understand This Critical Valuation Element of a Buy Sell Agreement All businesses with more than one shareholder should have a current, well-written buy-sell agreement, asserts Mercer Capital. And for clients with valuation processes as part of their agreements, it is critical to understand “levels of value”: Strategic Control Value, Financial Control Value, Marketable Minority Value, and Nonmarkettable Minority Value. Here’s more:
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The Impact of Fraud and Abuse Can Far Exceed the Value of Stolen Money—Civil Penalties Are Often Exorbitant Clients often look to their attorneys as trusted advisors on the issue of prevention of corporate fraud, waste, and abuse. In this article, Joe Epps identifies the impact occupational fraud and abuse has on a company; present governmental oversight issues associated with fraud and abuse; and several common corruption schemes. He offers recommendations regarding types of accounting evidence and methods necessary to support a financial status review.
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Difficulties Sometimes Complicate a Valuation Engagement. Here’s How to Anticipate and Derail Potential Disasters With Solid Upfront Client Conversations Conversations with clients are critical to ensure both owner and appraiser are in agreement about standards in a final report, the length of time the process will take, what the final report will look like, and how much it costs. In this second installment in a two-part series, Rand Curtiss takes us through common objections prospects challenge appraisers with and suggests savvy responses to each. Be sure to read part one HERE.
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Particularly When Valuing Companies with Substantial Foreign Operations, Business Valuation Analysts Know That Country-Specific Input Is Critical David Foster at BVWire News reports that in additional to his general data update for 2013, Prof. Aswath Damodaran (NYU Stern School of Business) provides a list of country default spreads and risk premiums. Here’s the professor’s assessment:
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Businesses Incur Expenses In Order to Generate Sales. Understanding How These Different Variables Relate to Each Other is Important. Here are Some Tips. Often experts present opinions based on statistical analysis. It helps to understand some basic statistical tools. Dave Sutherland discusses some tools used to test for relationships that may exist among data sets, such as sales, marketing, cost of goods sold, etc. Here’s why correlation may not always be evidence of causation.
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Plus: Rulings on Family Business Share Value in Oklahoma, Expert Witnessing in New Hampshire The California Appeals Court rules on whether a vineyard’s expectations for future profits for land taken in eminent domain proceedings was a reasonable extrapolation in The People v. Dry Canyon Enterprises, LLC. Click for more state case law on non-competition agreements, expert witnessing, and family business share value—from Texas, Oklahoma, and New Hampshire.
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Difficulties Sometimes Complicate a Valuation Engagement. Here’s How to Anticipate and Derail Potential Disasters With Solid, Upfront Client Conversations Conversations with clients, both current and prospective, are critically important to ensure both owner and appraiser are in agreement about what standards will be used to produce the final report, how long the process will take, and what it will ultimately look like and cost. In the first of a two-part series, Rand Curtiss takes us through a set of questions valuators should ask of clients, as well as some they should expect to be asked themselves.
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Buyers and Sellers Need to Negotiate Delivery Targets for Working Capital and Agree on a Fair Market Value for Fixed Assets. Valuation principles generally hold that the value of a business is largely a function of return on invested capital and growth, writes Ron Stacey, since these are the primary drivers of free cash flow. But how does this cash flow relate to the asset and liability values on the balance sheet?