Lesson 4. I Will Ask My CPA

Once you decide to have your business appraised, the first person you may think to call is your CPA. Your CPA may be a great choice if he or she has business valuation training, does a large number of them and their schedules permit. Otherwise you may want to consider a professional appraiser instead.

Most CPAs Don't Do Valuations . Visit the American Institute of Certified Public Accountants' website , and you will see about 128,000 of its members are in public practice (representing about 38.4% of the AICPA's total membership. The rest are in business and industry, education, government or retired). Of its members in public practice, fewer than 3% have earned either the ABV or the CVA designations conferred by the AICPA on its member who have undergone its valuation training program. Of course a CPA without a designation may be entirely capable of doing a first-rate valuation but this statistic suggests valuations are not something most CPAs do as a core part of their practice.

Why? First because they lack the specialized training required to be a competent appraiser. Second because the liability for screwing up a valuation are huge. As most CPAs are risk-averse, they tend to prefer their clients obtain a valuation from a recognized appraisal expert provided it can be obtained quickly and at a reasonable cost.

Lesson 1: Owners Make Bad Appraisers
Lesson 2: Ignorance Is Costly
Lesson 3: Why Rules-Of-Thumb Do Not Work
Lesson 4: I Will Ask My CPA
Lesson 5: How Appraisers Value A Business