Can A CPA Do A Business Valuation?

You’ve probably had this moment. You’re running a business and thinking about selling or bringing in a new partner. Someone suggests, “Get a valuation.” You nod, but quietly think, “Okay, but who do I call?”

A friend says, “Ask your CPA.” Another says, “No, use a business broker.” And just like that, you’re stuck. Confused, cautious, and figuring out how not to waste time or money. 

So, let’s make this simple. Let’s talk about what a CPA can do, what they probably shouldn’t, and how to figure out what’s best for your business.

What Can a CPA Do?

A Certified Public Accountant (CPA) prepares financial reports, files taxes, and performs audits to help businesses manage their finances confidently. If you already have one, they probably know your books better than you do. That alone can make them a good starting point if you're trying to figure out what your business is worth.

But here’s the thing: not every CPA learns how to value a business.

Business valuation is a different skill. It’s not just about reading your income statement or checking your tax returns. A proper valuation involves forecasting, comparing your business to similar businesses, and examining the market as a whole.

That’s where credentials come in. Some CPAs choose to build on their skills and earn advanced credentials, such as the ABV from the AICPA, to focus on business valuation. It means they took the time to acquire the skills necessary for a formal valuation. Without this, a CPA might not have the complete toolbox to give you a number you can rely on, especially if legal or investment decisions are on the line.

The Three Common Valuation Methods CPAs Use

If your CPA has the proper training, they’ll typically work within these three approaches:

1. Income Approach

It looks at your business’s future earnings and uses that to estimate value. Think of discounted cash flow and expected profits.

2. Market Approach

You compare your business to similar ones that recently sold, just like how you compare houses in real estate.

3. Asset-Based Approach

This method looks at your company’s assets minus liabilities. People often use it for asset-heavy businesses or when income varies.

If a CPA understands these well and uses the right one (or more), the result can be solid. But without the right background, they could easily miss the mark.

When a CPA Might Be a Good Choice

So, can a CPA do a business valuation? Yes—if they have the proper training, experience, and credentials.

They’re often a good fit if:

• You need a rough estimate before listing your business.

• You’re preparing for tax reporting or internal planning.

• You want a second opinion before hiring a full-time business broker.

• You’re planning a partner buy-in or buyout.

• You’re preparing financials for a possible merger or sale.

Because they already know your books, CPAs can save you time. And if they understand tax rules, they can help you plan around things like capital gains or IRS reporting.

When You Should Call a Business Valuation Expert

Some situations are just too high-stakes or complex for a general CPA. That’s where specialists come in. These individuals have spent years focusing solely on valuation. They hold credentials like:

• Certified Valuation Analyst (CVA)

• Accredited Senior Appraiser (ASA)

• Certified Business Appraiser (CBA)

They often work with a business broker, especially when a sale is involved. These professionals understand how to value a business, market it effectively, and negotiate a favorable deal. If you're selling your business or involved in litigation, this is the route to take.

Additionally, specific industries can be complex, consider SaaS, healthcare, or manufacturing. If your CPA isn’t familiar with your space, a specialized appraiser might catch more accurate numbers.

Risks of Using the Wrong Person

If your CPA doesn’t have business valuation experience, here’s what could happen:

• They undervalue or overvalue your company.

• They miss industry-specific factors.

• They base their work on outdated standards.

• You lose credibility in front of investors or the court.

• The IRS rejects the valuation for tax purposes.

Additionally, if your CPA is too closely associated with you or the business, it may raise concerns about potential bias. That matters in legal situations or negotiations.

Final Thoughts

So, can a CPA do a business valuation? Yes, but not all CPAs are equipped to do it right. If they hold valuation-specific credentials and understand the process, you’re in good hands, especially for everyday needs.

But if you’re making a big decision, selling, merging, or handling a dispute, it’s wise to call in a business valuation expert or a business broker. It ensures you're getting accurate, defensible numbers you can trust.

Ready to Know What Your Business Is Worth?

If you’re planning to sell or want an actual number you can count on, talk to the team at Sunbelt Texas.

Our business brokers and valuation experts work together to give you a clear, honest, and helpful business valuation.

Contact us today!

FAQs

Do all CPAs know how to do business valuations?

No. Some do, but only those with proper training and certifications, such as the ABV, are qualified.

Is it cheaper to use my CPA instead of a business appraiser?

It can be, especially if you need a quick estimate. However, for serious deals or legal cases, consider using a valuation specialist.

What’s the difference between a CPA and a business broker?

A CPA focuses on numbers and taxes. A business broker helps sell businesses, often working alongside valuation experts to set the right price.

Can I use a CPA’s valuation in court?

Courts reject informal or poorly done valuations only when the CPA fails to meet valuation standards or shows bias.

How do I know if my CPA is qualified to do a valuation?

Ask if they hold the ABV or similar credentials. Also, check if they’ve done valuations in your industry before.