What is Business Valuation?

Forensic Accounting and Fraud Examination

Read Chapters 15 and 16 in Forensic Accounting and Fraud Examination.

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The process of remediation occurs after the fraud has been discovered, analyzed and documented. Discuss what the term remediation means and the steps that a forensic accountant would be involved in to complete an examination. Discuss what types of remuneration might be available to victims.

 

What is Business Valuation?

Business valuation is defined as the act or process of determining the value of a business enterprise or ownership interest therein. This can be a
100% or a lessor ownership interest. In addition, the valuation date should be established.
A decision to be made at the beginning of the valuation process is
what standard of value applies to the matter at hand. Typically, in
Maryland, the standards of value used include fair market value and
fair value. Fair market value is used in marital dissolution matters and
is defined by the AICPA as:
“The price, expressed in terms of cash equivalents, at which property
would change hands between a hypothetical willing and able buyer and
a hypothetical willing and able seller, acting at arm’s length in an open
and unrestricted market, when neither is under compulsion to buy or
sell and when both have reasonable knowledge of the relevant facts.”
Fair value is used for shareholder disputes, it is defined by state law
and is similar to fair market value without the reduction of value for
a discount for lack of control, if applicable and a discount for lack of
marketability.

 

BusinessValuationBasics

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