Business Valuation and Financial Litigation—How to Do It: From Foundations to Advanced

Techniques to Use to Simplify Your Financially Complex Matrimonial Cases

Tuesday, December 12
9:15 a.m.–11:50 a.m.
3 hours CPE
This session will cover techniques which forensic accountants can utilize to make their financially complex matrimonial cases easier. This includes tips for identifying material issues, organizing their files, and working with attorneys and parties to invest time and money into recommended areas of analysis. Also, tips for presenting conclusions in a simple and easy to understand format.

Learning Objectives:

After completing the session, attendees will be able to:

• Evaluate and identify material issues in which they can meaningfully provide services
• Describe how to prioritize issues to cover the most important ones first
• Demonstrate and diagram complex transactions or business structures in an easy to understand summary
• Explain their analysis and the results of their work in an easy to follow manner

Fields of Study:

2 Accounting, 1 Business Law

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Karen Kaseno

Karen  Kaseno

CPA, ABV, CFF, CVA, CFE, MAFF

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Valuation in Disputes

Tuesday, December 12
9:15 a.m.–11:50 a.m.
3 hours CPE
This session will cover many topics which include: overview of the litigation process including the rules of evidence and discovery; interplay between valuation and the rules of evidence and discovery; the NACVA and AICPA standards and how they apply to a valuation in a litigation setting and what you can do; types of disputes that may require a business valuation; assumptions in valuation in litigation; techniques for finding, identifying supporting evidence for your valuation; relying on management projections, a do or a don't; report writing—supporting your opinions in your reports; and examples of valuations in a litigated context.

Learning Objectives:

After completing the session, attendees will be able to:

• Identify the basic valuation principals that are consistent with litigated and non-litigated cases
• Differentiate between procedures that may need to be performed when a valuation is performed in a non-litigated context
• Define types of evidence and techniques for report writing to support their opinions
• List the types of litigation matter that may require valuations
• Identify the litigation process and how the rules of discovery and evidence impact valuations

Fields of Study:

1 Business Law, 2 Finance

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Rebekah Smith

Rebekah  Smith

CPA, CVA, MAFF, CFF

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The Business Appraiser as Client Advocate

Tuesday, December 12
12:50 p.m.–2:30 p.m.
2 hours CPE
Business appraisers, when serving as experts, are precluded from acting as an advocate for the client. There is another high profile role for the appraiser as a client advocate. All association standards permit this activity, but little has been written or said about it. This unique session illustrates how the business appraiser functions as an advocate/consultant for a client, including: the pros and cons, practice opportunities, and case study examples.

Learning Objectives:

After completing this session, attendees will be able to:

• Identify situations where business appraisers may act as advocates for a client
• Cite professional standards and responsibilities in this area of appraisal practice
• Apply lessons learned from real world case studies

Fields of Study:

2 Taxes

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

An understanding of business appraisal review would be helpful, though not necessary.

Howard Lewis

Howard  Lewis

MS, CBA, CVA, ABAR, BCA

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Review Report, Rebuttal Report, or Both?

Tuesday, December 12
12:50 p.m.–2:30 p.m.
2 hours CPE
NACVA now has Standards regarding business valuation review reports. Attendees will learn approaches to develop and report their review conclusion as to credibility of another's business valuation report. Contrast a business valuation review report and a business valuation rebuttal report.

The same review process and principles might be applied to other expert reports such as damages measurement combining a review report (opinion of credibility) and a rebuttal report.

Learning Objectives:

After completing the session, attendees will be able to:

• Identify the focus of the review process contrasted with the focus of the rebuttal process
• Describe the elements that create credibility
• Identify resources in addition to the standards to assist in the development and reporting a review opinion
• Apply a review process to other types of reports such as damage measurement reports
• Distinguish between a review report and a rebuttal report and circumstances in which each might be applied

Fields of Study:

2 Accounting

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

None

P. Dermot O'Neill

P. Dermot  O'Neill

CPA, ABV, CFF, CVA, MAFF, ABAR

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Common Sense and the S Corp Value Question—A Reality Check

Tuesday, December 12
2:50 p.m.–4:30 p.m.
2 hours CPE
Over the years, the S Corp/PTE value question has provoked much attention and debate, in and out of court. Some of the best minds in valuation have offered research and mathematical models to resolve it. But, the result has been a thicket of complications.

This presentation seeks to cut a clear path through that thicket via a reality check.

We will: (1) provide a thorough look at the assumptions and flaws underlying all aspects of the S Corp/PTE value question; and (2) offer fresh, practical content that will allow attendees to address these issues more realistically and effectively.

Our discussion will be accompanied by a simple case illustration.

Learning Objectives:

After completing this session, attendees will be able to:

• Recognize and articulate the assumptions and their flaws that underlie the S Corp/PTE value question
• Apply concrete, practicable techniques for more effectively and realistically estimating S Corp/PTE value
• Debate these techniques simply and lucidly

Fields of Study:

2 Finance

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Sarah von Helfenstein

Sarah  von Helfenstein

MBA, CVA

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The Expert’s Role in Financial Litigation—Real-World Guidance for Managing the Engagement

Tuesday, December 12
2:50 p.m.–4:30 p.m.
2 hours CPE
The key factors that experienced litigation consultants consider when they evaluate and undertake a new litigation project are different than other types of engagements. Evaluating conflicts and engagement risk, obtaining the necessary information, interacting with and understanding counsel’s expectations, and knowing how to deal with the unexpected will result in more successful engagements, which, in turn, lead to a thriving practice.

Learning Objectives:

After completing this session, attendees will be able to:

• Assess a potential engagement, including potential conflicts, and determine the scope and risk associated with it
• List the best practices for fee arrangement, including engagement letter language and retainer policies
• Describe the applicable professional standards and how they apply to litigation engagements
• List best practices for communicating with counsel
• Describe the Daubert challenges—what they are, how they can impact the engagement, and how to avoid them

Fields of Study:

2 Business Management & Organization

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

None

T.J. Liles-Tims

T.J.  Liles-Tims

MBA, CVA, CFE, MAFF

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The Sanity Check—Hypothetical Willing Buyer and Willing Seller Test

Wednesday, December 13
9:15 a.m.–11:50 a.m.
3 hours CPE
A methodology to validate 100% marketable interest value using 14 tests to obtain and repay financing using current market leverage multiples/ratios along with testing the reasonableness of both goodwill value and the conclusion of value against market benchmarks. The presentation will take the participant through the methodology step by step, including edits that may occur in the conclusion of value to achieve one or more of the test criteria. Vetted in the United States District Court NW District of Ohio Western Division. This methodology is not used to validate DLOC, DLOM, or value of minority interests. Excel spreadsheets and report section provided to participants.

Learning Objectives:

After completing this session, attendees will be able to:

• Utilize the Sanity Check, a hypothetical willing buyer and willing seller test to validate the analyst’s conclusion of value of a 100% controlling interest on a marketable, controlling interest basis
• Test conclusion of value using current market data and capital access criteria
• Formulate, if necessary, discount rates, benefit streams, weights, and other valuation factors that require professional judgment or ranges to synthesize the conclusion of value
• Express the conclusion of value in court using understandable capital market criteria
• Apply an aspect of independent capital market reality check to a theoretical process

Fields of Study:

3 Accounting

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

Average understanding of Excel and WordAverage business valuation experience and knowledge; basic understanding of the capital markets.

Jill Ellen R. Christopher

Jill Ellen R.  Christopher

CPA, CVA, CFE

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Garth Tebay

Garth  Tebay

CPA, CVA, MAFF, CM&AA

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The Impact of Adverse Regulatory Action on Valuation

Wednesday, December 13
9:15 a.m.–11:50 a.m.
3 hours CPE
The authority of governmental enforcement agencies is growing, along with the move towards "transparency" requiring public disclosure of, and easy access to, adverse administrative actions. This session will discuss the nature of the regulatory environment, the effect on the valuation of a business, and the effect of such an action in valuing damages. Examples will be given from real–world cases. A public announcement by the FDA, for example, can severely damage the prospects of the subject food or pharmaceutical company. There will be discussion of effective research techniques to establish the facts and to find effective means of communicating the impact.

Learning Objectives:

After completing this session, attendees will be able to:

• Create awareness of the publicly available information on adverse administrative actions against businesses
• Utilize research tools to uncover such information
• Recognize the impact of publicity on the valuation of a business
• Describe the effect of adverse information on the calculation of lost income damages

Fields of Study:

1 Economics, 2 Finance

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

None

Chris Hamilton

Chris  Hamilton

CPA, CVA, CFE

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Matching Fundamental Risk and Return—Plus a Special Preview of Duff & Phelps' New Tools for 2018

Wednesday, December 13
12:50 p.m.–2:30 p.m.
2 hours CPE
Valuation analysts typically have quantified the relationship between risk and expected return by measuring risk in terms of beta and size. The Risk Premium Report Risk Study uses three fundamental or accounting information measures of profitability and earnings variability to predict returns.

James P. Harrington will discuss: (1) using fundamental or accounting information as a predictor of return, and (2) how to use the Risk Premium Report Risk Study’s “Comparative Risk Study” to further refine cost of equity estimates by gauging how alike or different the subject company is compared to the companies that make up the Risk Premium Report Risk Study portfolios.

Learning Objectives:

After completing this session, attendees will be able to:

• Differentiate between stock market based predictors of return (e.g., beta, size) and fundamental or accounting information predictors of return
• Estimate the cost of equity capital using fundamental or accounting information predictors of return
• Calculate cost of equity estimates by gauging how alike or different the subject company is compared to the companies that make up the Risk Premium Report Risk Study portfolios

Fields of Study:

2 Finance

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

None

James Harrington

James  Harrington

MBA

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Financial Statements are Written Confessions©

Wednesday, December 13
12:50 p.m.–2:30 p.m.
2 hours CPE
This session will focus on the key techniques used to assess financial statement veracity for virtually all types of financial statements, including: audits, reviews, compilations, OCBOA, and other bases. Techniques include: CRO, Sloan™ Accruals, Beneish™ TATA, and variations, among others. In addition, financial statement notes analysis via forensic lexicology will be demonstrated. Additional resources will be identified.

Learning Objectives:

After completing this session, attendees will be able to:

• Explain the definition of financial forensics/forensic accounting and the fundamental and essential skills necessary to successfully practice
• Identify the key tools, techniques, methods, and methodologies applicable to all areas of practice, including additional sources of information and learning
• List more than two dozen specific examples of tools, techniques, methods, and methodologies
• Differentiate between financial forensics/forensic accounting and fraud, including knowing which courses to avoid, e.g. foundations
• Define why the attendees are more qualified than those who have not attended

Fields of Study:

2 Accounting

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

None

Darrell D. Dorrell

Darrell D.  Dorrell

CPA, ABV, MBA, ASA, CVA, CMA, CFF

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Valuing Complex Family Limited Partnerships and LLCs

Wednesday, December 13
2:50 p.m.–4:30 p.m.
2 hours CPE
Using an analytical method for valuing FLPs, including the Income and Market Approaches, allows appraisers to more accurately and objectively determine value. As professional methodology has advanced, there are certain types of partnerships that may be considered complicated. This session will focus on valuing complex FLPs, including: high debt real estate FLPs, multiple asset FLPs, oil and gas FLPs, and non-income producing FLPs using case studies. In addition, issues such as how to handle the FLPs that own privately held stock, multiple (stacked) partnership interests, venture capital funds, general partnership interests, and promissory notes.

Learning Objectives:

After completing this session, attendees will be able to:

• Determine the pitfalls of using average discounts from studies when valuing FLP interests
• Explain how the Tax Court responded to FLP appraisals that are not objectively supported with empirical data
• Utilize the proper data to support the determination of discount rates
• Summarize the criteria necessary for the selection of guideline entities
• Prepare a bullet proof appraisal that will accurately determine the correct value and be supportable
• Use case studies to illustrate the step by step procedures on how to apply practical methods to value complex FLP interests
• Recognize common problems; analyze and select the proper data to support their conclusions
• Prepare an appraisal that will withstand the scrutiny of the IRS and the Tax Court

Fields of Study:

1 Business Law, 1 Finance

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

Taken a valuation course or webinar on valuing FLPs; read Comprehensive Guide for the Valuation of Family Limited Partnerships; and reviewed Chapter 14 of PPC's Guide to Business Valuations.

Bruce Johnson

Bruce  Johnson

ASA

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Forensic 2.0—Digital Age and Electronically Stored Information

Wednesday, December 13
2:50 p.m.–4:30 p.m.
2 hours CPE
Problem: Today, forensic accounts are bombarded with technical terms (i.e., cyber, cloud, software as a service) related to technology in this digital age. It is difficult to keep current in the field being that our core business is not information technology. This session serves as a tech talk for forensic accountants; breaking down those mystical terms, discussing their relevancy to forensic accounting, and identifying tech trends in the world of fraud.

Learning Objectives:

After completing the session, attendees will be able to:

• Define technology trends used in fraud today
• Identify tech terms and understand what they mean
• Distinguish between technology expertise required for forensic accounting investigations and those of which to be aware
• List various types of technologies and their uses
• Employ newfound knowledge of technology while working in the business industry
• Interpret tech lingo used across the industry
• Recognize technologies when exposed to them in the business world
• Relate current technologies and trends to the forensic accounting profession
• Translate complex IT terms into basic terms for business and/or court settings

Fields of Study:

2 Computer Software & Applications

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Christina Chard

Christina  Chard

MFAcc, AFI, PMP, ITILv3

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