Expert Alphabet Soup - Jumble of Letters Represent Significant Expert Titles for Litigants and Judges
The financial forensic1 experts of today possess a litany of credentials and licenses that are intended to promote and define their particular expertise. This article provides attorneys and clients the recipe for the "alphabet soup" that follows the name of an expert in order to assist in their hiring or cross examination in litigation. Simplified explanations, commentary and web page references are included for the most common and widely-held litigation-oriented credentials2.
FINANCIAL: The CPA, Certified Public Accountant, is a state-issued license that is well known and respected by judges and juries. Currently, the CPA license requires a five-year college degree, passing what is perceived as one of the most difficult of professional exams plus two years of supervised experience. CPAs are governed by the holder's state board of accountancy3 and the AICPA, American Institute of Certified Public Accountants4. CPAs must obtain forty hours of continuing professional education per year and must adhere to a strict code of ethics. CFAs, or Chartered Financial Analysts, 5 are focused on investment analysis and valuation. The designation requires an intensive educational course, passing a rigorous exam and three years of experience, but requires no continuing education. The CFP, Certified Financial Planner6, is oriented towards personal financial planning, requires passing a comprehensive exam and completion of thirty hours of continuing education every two years. CFAs and CFPs, along with CPAs, must adhere to strict ethical and competency guidelines. The CDFA, Certified Divorce Financial Analyst7 is a credential which requires passing an online exam.
BUSINESS VALUATION: Valuation credentials have become more prevalent in the last fifteen years and are essential if one is attempting to qualify as an expert witness. The ABV, Accredited in Business Valuation8, and CVA, Certified Valuation Analyst9 are issued by the AICPA and National Association of Certified Valuation Analysts, respectively. The CVA requires an intensive valuation course or holding of another valuation credential and passing a rigorous exam. The ABV requires a similar exam and valuation experience. Both credentials require the holding of a valid CPA license, therefore the ethical and continuing education requirements apply. The American Society of Appraisers issues the ASA, Accredited Senior Appraiser10, which requires a college degree, passing a comprehensive exam, five years of experience and obtaining forty hours of continuing education very five years. ASAs are usually not CPAs therefore they generally have less of a background in accounting and tax issues.
FORENSICS: A relatively new but rapidly expanding designation is the CFF, Certified in Financial Forensics11, which is issued by the AICPA. The CFF requires holding a valid CPA license, a minimum of one thousand hours of work experience and seventy-five hours of education in forensic-related disciplines. Since the CPA is required, the ethical and continuing education requirements apply. Almost all serious fraud investigators hold the CFE, Certified Fraud Examiner12. The CFE is issued by the Association of Certified Fraud Examiners and requires a bachelor's degree, two years of experience, passing a comprehensive exam and completing twenty hours of continuing education per year.
REAL ESTATE: Commercial litigation and divorce often require a real estate appraisal. Two very respected appraisal credentials are the MAI and SRA, both of which are issued by The Appraisal Institute13. The SRA is more residential-oriented. The two credentials are not acronyms like the others described in this article. Current requirements for the MAI and SRA include completing rigorous education requirements, submitting specialized experience descriptions and receiving credit for a demonstration appraisal report. The MAI additionally requires passing a comprehensive exam. Holders of both designations must adhere to a strict code of ethics and are subject to a peer review process.
In the litigation context, how does one score the relevance of a set of letters? In addition to the education, years of experience and testing required to obtain a credential, the question of relevance is answered by the professional standards, ethics and continuing educational requirements of the credentialing organization. The most respected organizations require continuing education in their specific discipline and have procedures in place for public complaints and disciplinary proceedings that can subject an expert to legal and monetary consequences by way of suspending a credential. Most of the above-described organizations have disciplinary mechanisms in place, but all of the credentials requiring the CPA license as a prerequisite have the full force and effect of state statutes enforced by a government agency, each state's board of accountancy.
The "alphabet soup" of credentials can be a jumble, but these letters can help the litigants and judges separate the wheat from the chaff. A practitioner attempting to qualify in court as an expert should hold a recognizable and respected credential if one exists in that niche. The CPA is essential for all things financial since judges recognize and respect the license. The CFA and CFP are essential designations in investment-related matters and both boost the expert's credibility in divorces due to the personal nature of the finances involved. The CFF represents longevity and a commitment to forensic accounting and litigation support and the CFE represents intensive training for fraud-related engagements. A business valuation expert must have a CVA, ABV or ASA in order to demonstrate competency in this niche and a real estate appraiser's credibility is boosted greatly if he/she has earned the MAI and/or SRA.
by Robert Vance, CPA/ABV/CFF, CVA, CFP
Visit the Valuation Services Web page
Lattimore Black Morgan & Cain, PC
615-377-4600
1Black's Law Dictionary defines "forensic" as belonging to courts of justice.
2Other very credible credentials that are less widely held exist, but were not included due to space limitations.
3www.state.tn.us/commerce/boards/tnsba/
4www.aicpa.org
5www.cfainstitute.org
6www.cfp.net
7www.institutedfa.com
8http://fvs.aicpa.org/
9www.nacva.com
10 www.appraisers.org
11http://fvs.aicpa.org/
12www.acfe.org
13www.appraisalinstitute.org
Questions and Answers
In this article the author discusses the records you company should be keeping after you have registered your new company.Following your company registration there are a number of obligations and filings to Companies House that you are required to complete.
In this article the author discusses the requirements for year end accountants of private limited companies.Year end accountantsare usually required to prepare annual accounts for private limited companiesat the end of each financial year.
If you are finding it hard to sort out your tax returns, it may be time you hired an accountant to help you out with them. Here are a few ways that an accountant can turn out to be an excellent investment.
First of all, let us consider the financial impact of employing a virtual accountant. Organizations can get the same quality of work done by outsourcing with lesser costs attached.
There are various benefits when you choose Accounts Receivable Factoring for funding your business requirements. With credible receivables, you can receive cash immediately to meet your business needs with receivables factoring.
Recently the Wall Street Journal published an article about a new security flaw found in the PayPal iPhone application. As part of the renovated LBMC.com launch, we are giving away 3 free iPads! Improvements to the LBMC website include a fresh new look and feel, the addition of industry focused sections, more integrated resources, and an improved management directory.
People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service.
President Obama Signs HIRE Act - New Law Provides Hiring Incentives, Expensing Extension and More - On March 18, 2010 President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act. The President's signature sets the effective date for numerous HIRE Act provisions with an effective date geared to the March 18, 2010, date of enactment. Significant provisions of the new law include:
So, how’s this recession thing going for you? Is it clear how the future is going to unfold for you and your customers? Have you cut all the expenses you care to? Are you ready to grow again? Are you ready to acquire – or to be acquired?
On Sept. 9, Moody’s Economy.com Chief Economist Mark Zandi stated unequivocally: The Great Recession that began in December 2007 likely ended in August 2009. Although a bond-rating agency that was arguably asleep at the switch before the crisis, Moody’s prognostications have been spot-on over the last 7-8 months. Zandi’s picture of the ongoing recovery is not exactly pretty, and he is quick to point out that there is still a lot of work to do and that a lot can still go wrong.
Discuss this Article
