Managing the tension……. between appraiser independence and an ever-more rigorous audit review is one of the foremost challenges with financial reporting appraisals. These valuation engagements have become so much more complex because of the heightened oversight and increased visibility of financial reports. Even private companies are under pressure to apply GAAP concepts that were once applied only to the publics.

“Front-End the Audit Review”…... If you hire us, you’ll hear this term. We want to talk with your auditor; we will explain our methodologies and assumptions and ask that they “buy in” early. This precludes problems down the road, when time is tight and your expenditures to the appraiser should end. It works, really!

The Auditing Standards Board of AICPA (via SAS No. 101) provides guidance to independent auditors about the use of a specialist’s work when audits of financial statements are prepared in accordance with GAAP.

The firm’s financial reporting appraisals (FAS-141, 142, 144, 123r, etc.) have been SAS-101 reviewed—and approved– by all four major accounting firms and by many regional accounting firms. In addition, many independent appraisal firms have reviewed our work and complimented the firm on its thoroughness.

AICPA/FASB Guidance: This accounting organization has issued several valuation related publications that are widely utilized by accountants and appraisers (partial listing below). These publications provide significant guidance on the proper methods for completing financial reporting ‘fair value’ appraisals. At MK Appraisal Group, we have fully implemented this guidance into our appraisal procedures, models and reports. And, we find the auditor community is very pleased with these efforts.

- Assets Acquired….to be Used in R&D, (known as the “IPR&D Practice Aid”), issued in 2001.
- Auditing Fair Value Measurements & Disclosures, A Toolkit for Auditors, issued in 2002.
- Valuation of Privately Held Company Equity Securities Issued as Compensation, issued in   2004.