By John Borrowman, CPC
Borrowman Baker, LLC, BV Staffing + Consulting
Gallatin, TN

Business Valuation practices across the country are beginning to feel the pinch of not having enough qualified and experienced staff.  Work is expanding faster than the supply of talent.

BV is unique in that while there are commonly-taught skills that are required to succeed in the field, there’s almost no substitute for the actual experience itself. This is what makes it so difficult to hire anyone from outside the industry for any position above entry-level. Credential-driven training, then, can be one of the most important tool employers have.

For the second of our series on the subject of training for the BV industry, we explored the new series of training being offered through the AICPA. We talked to Lindon Greene and Ron Seigneur about that training and how it evolved to its current level.

According to Seigneur, AICPA’s original education for valuing closely-held businesses was adapted from content first developed by the State of Illinois CPA Society. The training was delivered in eight one-day modules, each followed by a test of about 20 to 30 multiple choice questions. Upon completion of all eight days, attendees were awarded a Certificate of Educational Achievement, or CEA, and earned a total of 72 hours of CPE.

Greene pointed out that the CEA that attendees received was designed to recognize that they had put more effort into this particular education. Still, it wasn’t the same as an actual designation or specialty credential in this particular line of practice. And that was one important element in the discussions in 1997 when the actual ABV was being rolled out.

Seigneur was part of this discussion. He recalls some concern that the CEA could “confuse the marketplace” because there were some, apparently, who were treating it as a professional credential. About this time, a group of practitioners came together and concluded that the CEA needed to be scrapped and the ABV training “freshened up”. The eight one-day sessions were tightened up into two three-day courses and renamed the Fundamentals of Business Valuation.

Fast-forward to today. Greene and Seigneur have, again, been involved in updating AICPA’s valuation training curriculum into Business Valuation Essentials. “Notice that it’s not Fundamentals, it’s Essentials”, says Greene. “We asked ourselves what is needed, essentially, to gain the body of knowledge to initiate a practice in this area. In essence, when we look at the courses, we look at what we essentially need to teach.”

The new BVE curriculum includes six single-day courses. The first five discuss valuation theory, applications, best practice methods, and controversies through easily understood text, numerous examples, and exercises. The sixth course is a case study (based on a real-life valuation) that ties together the applications, methods and controversies from the previous courses. In addition to the Essentials curriculum, there are courses that cover cost of capital, discounts and premiums, and goodwill and intangible assets. Seigneur explained that part of the rationale for returning to single-day courses was to make it easier for the various state CPA societies to schedule them for their members. At the same time, AICPA is testing a “boot camp” concept that offers all six courses consecutively. The next scheduled boot camp is in Dallas, in September.

As contrasted with the ASA credential, obtaining the ABV credential does not require applicants to have taken certain courses before sitting for the exam. Both Greene and Seigneur highly recommend the BVE series, however, as a precursor to the exam. Seigneur goes a step further to say that “to be sound as practitioners is more important than being able to pass the exam”.

For those practitioners who feel they can skip these essentials, there is a separate stand-alone course that reviews the Content Specification Outline (CSO) which forms the heart of the exam.

Neither Greene nor Seigneur feels that the 86 hours of courses developed so far reaches the limit of what they’d like to see in professional education for valuation practitioners. Both admit they’ve had their hands full with the development of these courses, however. While they have ideas for what might be next, further development takes a back seat to getting the BVE series rolled out.

More information about the Business Valuation Essentials course series and the ABV credential can be found by going to the Business Valuation and Forensic & Litigation Services Center on the AICPA website.

John Borrowman