Red Flags in a Small Business Valuation

Learning Objectives

• To identify red flags in a small business valuation.
• To recognize standards for preparing a small business valuation.
• To describe how a basic analysis is performed for a small business valuation.
• To recognize common errors in a business valuation.
• To identify risks a valuator should consider.
• To differentiate types of fraud and describe a conclusion of value.
• To identify true statements regarding an asset sale.
• To recognize the number one data break that targets a small business.
• To describe what can be presented in a court of law and used in litigation cases.
• To identify which type of transaction is difficult to do with skimming.
• To recognize common errors small businesses, make concerning depreciation.
• To differentiate correct statements about cybersecurity.

Course Description

The Business Valuation section presents guidance on performing valuations of closely-held businesses and intangible assets, including an overview of the valuation process, the factors to consider before accepting the valuation engagement, and the various methods of valuation. Valuation reports are often voluminous and highly complex. The task of reviewing a valuation report can be a daunting one, especially for someone without valuation training. Errors made in business valuation appraisals may result in a material misstatement of a company’s value.

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 evaluators should be alert to?

Not every valuation professional can be a fraud expert but it is still necessary to be alert to the red flags that a small business owner might be providing false or misleading information to influence a valuator’s opinion. This online CPE webinar will review the standards for properly preparing a small business valuation report. The CPE course will cover the basic items a valuator should be aware of to ensure an inaccurate valuation opinion is not released.

This CPE Finance webinar covers the following Key Topics: 

• Valuation Engagements
• Elements of a Business Valuation
• Basic Analysis of a Business Valuation
• Valuation Risk and Common Valuation Errors
• Business Sales vs Asset Sales
• Error vs. Fraud
• Ownership, Vendor, and Customer Red Flags
• Small Business Financials
• Inventory Valuation Methods
• Inventory Tracking Methods
• Audit Trail
• Owner Skimming
• Refund Frauds
• Employee Refunding
• Falsification of Owner Hours Worked
• Unrealistic Estimates and related Cybersecurity Issues

Overview

• Valuation engagements

  5 mins
• Basic analysis of a business valuation

  13 mins
• Common valuation errors

  23 mins
• 2020 Top valuation & Damages cases

  46 mins
• Ownership red flags

  69 mins