Red Flags in Small Business Valuations

Author: Robert K Minniti

When conducting a valuation of a small business it is always possible the owner or owner’s representatives might provide false information, either intentionally or unintentionally, in an attempt to influence the final valuation number. What are some of the red flags that valuators should be alert to? Not every valuation professional can be an expert on fraud, but it is still necessary to be alert for the red flags that a small business owner might be providing false or misleading information in order to influence a valuator’s opinion. We will also review the standards for properly preparing a small business valuation report. The course will cover the basic items a valuator should be aware of in order to help ensure an inaccurate valuation opinion is not released.

Publication Date: April 2024

Designed For
CFOs, CEOs, CPAs, CFEs, CFFs, CIAs, MAFFs, CVAs, ABVs, CMAs, business owners, business managers, internal auditors, external auditors, corporate accountants, government accountants and risk management personnel.

Topics Covered

• Business Valuation Engagements
• Business Valuations
• Common Valuation Errors
• Valuation in the News
• 2023 Top Valuation & Damages Cases
• 2022 Top Valuation & Damages Cases
• 2020 Top Valuation & Damages Cases
• Economic Report Issues
• Business Valuation News
• Errors vs Fraud
• Cybersecurity Issues

Learning Objectives

• Identify red flags in a small business valuation
• Recognize standards for preparing a small business valuation
• Identify the inventory valuation method that assumes the most recent inventory purchases are the first ones to be sold
• Identify the state that has allowed experts to present business calculations in court in 2023
• Identify the engagement that would use an agreed upon approach and method to determine the value of a business

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
None

Advance Preparation
None