How can CPA’s utilize the BizEquity system and report?

I am providing you with a multi-faceted analysis as to how CPA's can use the Bizequity system and report. CPA's are unique in the valuation world due to potential conflict of interest ramifications with their clients.

In short, CPA's can use our report WITHOUT violating SSVS 1, but it is not considered a formal report (neither a valuation engagement OR a calculation engagement) and this must be disclosed.

Therefore, it appears that the CPA must either "own" the valuation work and follow SSVS 1 (and perform all required steps and considerations of either a calculation engagement or a valuation engagement) or "rely on a third party" such as Bizequity and its mechanical computations to provide feedback and suggestions in an advisor role (without applying valuation approaches and methods and using professional judgment).

The general issue is:

"I’ve had a few CPAs tell me that the AICPA requires a specific certification to allow then to perform business valuations- does this allow you to bypass that?"

There are many considerations when contemplating the issue of CPA's and business valuation, but some of the main findings include:

1) A CPA can perform a business valuation without an additional certification such as CBA or CVA or ABV, but they MUST follow SSVS 1 (see document titled "AICPA Valuation Standards Fact Sheet" for general information).

2) The AICPA recommends that CPA's obtain additional certification such as their own "ABV" (Accredited in Business Valuation) or the "CVA" (Certified Valuation Analyst), but it is NOT required to perform business valuation work.

3) Although additional certification is not required, a CPA without additional certification can NOT perform valuation services for the IRS, e.g. estate and gift tax reporting. The same would apply generally to all litigation situations.

4) Section 6995A of the Pension Protection Act of 2006 provides definitions of a "qualified appraisal" and a "qualified appraiser", with the upshot being that only those with additional certifications who regularly perform appraisals for compensation capable of producing a qualified appraisal. The document titled "Qualified Appraiser and Qualified Appraisal for IRS Purposes" provides detailed insight into this situation.

5) Nonetheless, there are myriad reasons for and opportunities to use the Bizequity system and report which are consistent with SSVS 1. The document titled "Bizequity Reports and CPA's: A Valuable Pair" provides insight into why and how our system and reports can be effectively utilized by CPA's.

So once again - a CPA can use and discuss our report with their clients and NOT violate SSVS1, but it is not a formal appraisal (neither a valuation engagement or a calculation engagement).