Question

1.) Summarize the history of the valuation profession.

2.) Why are businesses valued?

3.) Who values businesses?

4.) Describe some of the professional valuation organizations.

Ch. 2: Review Questions

1.) What are the business valuation standards of the AICPA?

2.) What are the business valuation standards of the other valuation organizations?

Ch. 3: Review Questions

1.) Briefly describe the reasons why you would and would not accept a business valuation engagement.

2.) Discuss the process of defining the engagement and writing the engagement letter.

3.) Discuss the process of the initial document request.

Answer 1

1) The valuation profession has a history of 7500 BC that also shows the conservative form of accounting in treating transactions in different books of accounts. As per this view, the goodwill is not included in the financial statements of the business.

2) The valuation of the business is essential to determine the value of various things that takes place in an entity such as the value of items sold by an entity by identifying its fair value.

3) There are various entities that value businesses such as investors, shareholders who give their share in the business. For determining its return, it is important to know the value of the business.

4) Various professional valuations organizations that help in valuing the businesses are given as below:

WAVO- It stands for world association for valuation organizations that value the property held by an individual or group of individuals in a particular year.