Career: Business Valuator
A business valuator is a certified public accountant (CPA) who has chosen to specialize as an appraiser of businesses, both large and small. Certified public accountants sell their financial services to the public and to private businesses for a fee. A CPA might provide accounting and tax services or aid in appraising the value of a private estate, a small business, or even a large corporation. Business valuators, like their general financial practitioner cousins, will crunch data about the assets, liabilities, and capital of a company to prepare profit and loss statements and show the financial position of a company. However, business valuators aren’t necessarily doing this so that a company can determine how much money it has to invest, as CPAs do. A business valuator is often assessing the worth of a company so that another company can decide whether or not to acquire it, or conversely, what kind of offer they will accept if another company is trying to acquire them.
In 1996, business mergers and acquisitions totaled $449.4 billion, setting an all-time record. As the world hurtles toward becoming one very large corporation, business valuators are finding their services in more demand than ever, and more CPAs are deciding to specialize their talents to capitalize on these opportunities. Although there are more than 500,000 CPAs in the workforce, only some of them specialize in business valuation. Business valuators determine what a company is worth by considering its assets, competitiveness in the market place, and even how much high-profile executives contribute to the company’s profits. Valuators must also determine what a company’s tax burden will be, since that directly affects profit. There is a lot of work that goes into accurately figuring all of these numbers. Work hours can be long and stress level high. Business valuators who have their own businesses tend to work longer hours than those employed by public accounting firms (who average a 40 hour work week). While much of the numbers crunching is done at their desks, valuators tend to travel often to meet directly with their clients.
Business valuators are also beginning to enter the public world on a larger basis, finding work evaluating assets such as stock options or estates in divorces and bequests. In this day and age, a high-profile divorce can earn a business valuator a fee as attractive as a corporate commission.
A bachelor’s degree in accounting, business, or a related field is a requirement, and an MBA in finance or accounting will increase your earning power in the field. But education alone does not make one able to become a business valuator. The best opportunities for employment come to those who are first CPAs for, in most states, CPAs are the only accountants who are licensed and regulated. CPAs must obtain a certificate and license issued by a state board of accountancy.
Because business valuators are not regulated by the federal government, there is a growing concern that a regulatory board be created to set up blanket professional standards and ethics. The American Institute of Certified Public Accountants (AICPA), which certifies public accountants, has developed the ABV (Accredited in Business Valuation) designation that offered its first certification exam in November 1997. The AICPA is an independent professional regulatory organization that extends accreditation to those business valuators who pass the ABV examination. As business valuation becomes even more prolific, most clients will look for business valuators, just as they look for CPAs, who are accredited both as CPAs and ABVs and uphold the professional standards of the AICPA.
Valuation is a corporate career track, and business valuators must fit the corporate culture, even those who run their own financial planning businesses and are not associated with a bank or accounting firm. Because training in accounting is necessary, business valuators tend to choose other career options that exploit these skills. Some choose to focus on other disciplines under the umbrella of certified public accountancy, while others gravitate to professions as financial analysts and managers, actuaries, and loan officers. Experienced business valuators can find satisfying careers as investment bankers, bank officers, as directors or managers of accounting, or as full-time teachers at colleges and universities. Most often, business valuators/public accountants shift into management accounting and internal auditing.