I recently returned from two West Coast trips. In one I co-instructed the California CPA Education Foundation’s (CA Foundation) three-day program that teaches the AICPA’s Accredited in Business Valuation (ABV) Exam Review course. In the other I co-chaired, spoke and attended the AICPA’s National Forensic Accounting Conference on Fraud & Litigation. Both trips allowed me to observe and reflect on what several seasoned CPA experts are unselfishly doing to assist/mentor other CPAs in the development of their niche practices. This article focuses on my observations of the ABV Exam Review course that was held in Century City, CA, in October.

I have been teaching the ABV Exam Review course nationally for some time, including the last six years for the CA Foundation. What California does to recruit, teach and develop its CPAs with business valuation programs should be bottled up and sold to the rest of the country. California has long been recognized as a leader in developing continuing education and other programs for the forensic and valuation experts in our profession.

Business Valuation Fundamentals: Two of the leaders who need to be recognized for their superior efforts are James A. Andersen, CPA, ABV, ASA and Richard S. Barnes, CPA, ABV, CFF. Through their efforts the CA Foundation has revised and implemented effective fundamental courses (Business Valuation Fundamentals Part 1 and Part 2) that allow participants to spend six interactive days covering not just conventional business valuation work, but also includes such areas as merger and acquisitions, buy-sell agreements, succession and estate planning, FAS 141 and 142 and economic damages including lost profits and loss of business value. Two books that are part of the generally accepted body of knowledge for business valuations (Financial Valuations Applications and Models, 2nd Edition and Financial Valuations Workbook) are given to the participants during the course to build their own reference libraries. In addition, the course instructors supplement the text materials with a 900-page binder, which includes multiple-report examples, engagement letter templates, discussion papers, outlines and other real-world resources. These materials enable the participants to begin to learn the basics in the science and the art of business valuations. More importantly Andersen and Barnes bring their passion and considerable business valuation experience to the participants. They inform CPAs that the road to mastering their business valuation skills is a long and winding one. A lot of the science of business valuation (BV) is not experienced by CPAs in their day-to-day practices. “It is critical that the participants be able to recognize what they don’t know and develop an effective plan to work on their weaknesses so they can pass the ABV examination,” says Barnes.

“I now use the Summary of Business Research Databases for Business Valuation Use that Andersen provided us as part of my reference materials,” indicated Theresa Klass, CPA who will be taking the ABV exam later this year. Andersen reiterates the CA Foundation slogan of “We help you succeed!” whenever we teach the fundamentals course, but also informs the participants that if it is to be, it is primarily up to them. Both Andersen and Barnes encourage the participants, fresh from the Business Fundamentals programs, to continue to expand their BV knowledge, to take the ABV Exam Review course and then challenge the examination. Procrastination is not a word in the dictionary for these two individuals. The instructors provide the students with their own personal contact information and encourage the students to contact them for any problems they encounter (even after they pass the examination).

The CA Foundation (and its team of instructors and volunteers) have also developed special eight-hour programs like the “Business Valuation Overview” and “Business Valuation Conference” that attract CPAs (including audit professionals), attorneys, judges and other consultants to learn more about BV (fair value measurement, the AICPA’s valuation standards, convergence of international standards and other issues) that have propelled business valuation to the spotlight of the CPA profession. Barnes is a big believer that “It’s all about marketing to the right audiences.” These programs have been instrumental in recruiting hundreds of CPAs to follow the path of obtaining their ABV accreditation. By the way, the CA Foundation programs are held in locations that encourage the participants to work hard and enjoy the sites. In 2007, courses were held at The Venetian in Las Vegas, where the CA Foundation hooked up with the Nevada Society of CPAs.

The ABV Examination Review Course and Exam: The “AICPA’s ABV designation is the most rigorous and prestigious of the business valuation accreditations. In a short time, it has become an essential marketing tool for the CPA planning to specialize in this lucrative practice area.” (High-quality CPE Maximum Value, California CPA Education Foundation, May 2008 – April 2009 CPE Program Guide, page 93.) This year the AICPA’s ABV Exam Review course was expanded to three days to allow participants more time to work multiple choice questions (including problems and case studies). The AICPA carefully guards the questions that are used on the ABV examination and are not privy to the instructors who teach the review course. However, the Exam Review course attempts to simulate problems similar to those that may be encountered on the ABV examination by choosing content from a comprehensive course outline.

The participants taking the review course are different in age and experience each year. In California, most of the participants are local; however, several come from around the United States to prepare for the examination. During the course, participants focus on their strengths and weaknesses. By the time they leave, they know what to work on prior to the exam. “It’s a review course and not a fundamentals course,” says co-instructor Elizabeth Schrupp, CPA, ABV, CFF. Participants are strongly encouraged to spend more than ample time to prepare.

The Mentoring Process

The mentoring process doesn’t stop here. It continues during class, at breaks and after-hours. Scot W. Evanhoe, CPA says it best. “I enjoyed the class and although I did not have the experience of some of my classmates, I feel that the information and direction provided [has] well equipped [me] to make an attempt at the test in December. I do know, however, that I have a lot of work ahead of me over the next six to eight weeks but I feel I have the needed tools.” Evanhoe also plans on keeping in touch with Andersen and Barnes for their help in developing his niche BV practice in the future.

Barnes and I also remember a participant who took the ABV Review Course in Dallas a few years back. We encouraged that participant to stay in touch and develop her niche BV practice. Through the mentoring process, Schrupp has replaced Barnes as a co-instructor for the ABV Exam Review Course in California for the last three years. In addition, she has taught the program in her hometown of Dallas.

Conclusion

Good luck to Evanhoe, Schrupp and the rest of the participants taking the ABV examination. I believe that many of my fellow co-instructors who teach the program share similar thoughts that I had when I passed the ABV examination. The accreditation is a new beginning. One realizes that credible business valuations are an art and a science that come from significant experience and hard work. We encourage all the participants from the review course to develop their Forensic & Valuation practices by becoming active in the Forensic & Valuation Community and to attend future AICPA National Conferences (Forensic & Valuation) for networking purposes.

Robert P. Gray, CPA, ABV, CFE, FACFEI, Principal, Forensic & Litigation Services, Parente Randolph, LLC, Dallas, TX. Gray has an extensive background in financial/accounting analyses, business valuation, economic damages, forensic investigation and litigation. He is a member of the AICPA’s Forensic & Litigation Services Committee, which provides professional guidance to CPAs who perform fraud investigations and determine economic damages.