Page 14 - Bankruptcy and Reorganization Services

Chapter 3

Professional Standards and Nonauthoritative Guidance

Bankruptcy, valuation, and litigation services are considered consulting services provided by FVS prac-
titioners as business advisers. This practice aid will address the broader issues and topics related to busi-
ness valuation specifically from the perspective of a practitioner who performs the valuation of a busi-
ness, business ownership interest, security or intangible asset (hereinafter referred to as an analyst) for
bankruptcy and bankruptcy-related engagements. As such, Statement on Standards for Forensic Services
(SSFS) No. 1 (FS section 100), CS section 100, Consulting Services: Definitions and Standards, and VS
section 100, Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset, apply
to these engagements. fn 1 SSFS No. 1, CS section 100 and VS section 100 are as authoritative as the
Statements on Standards for Attestation Engagements (SSAEs) and the Statements on Standards for Ac-
counting and Review Services (SSARSs). Therefore, bankruptcy and business valuation engagements
that fall under these standards are also subject to the "General Standards Rule" (ET sec. 1.300.001 and
2.300.001) and "Compliance With Standards Rule" (ET sec. 1.310.001 and 2.310.001). fn 2

In order to adhere to the "General Standards Rule," practitioners must (1) undertake only those services
that can be completed with professional competence, (2) exercise due professional care in the perfor-
mance of professional services, (3) adequately plan and supervise the performance of professional ser-
vices, and (4) obtain sufficient relevant data in support of their conclusions. Practitioners must plan each
engagement thoroughly and understand that the planning process will continue to evolve as each phase
of the engagement is initiated.

Authoritative Guidance

The following authoritative guidance applies to litigation and bankruptcy services as well as to any other
service provided by practioners in public practice:

 AICPA Code of Professional Conduct

 SSFS No. 1

 CS section 100

 VS section 100

 FASB Accounting Standards Codification (ASC) 852, Reorganizations

fn 1 All FS sections can be found in AICPA Professional Studies.

All CS sections can be found in AICPA Professional Studies.

All VS sections can be found in AICPA Professional Studies.

fn 2 All ET sections can be found in AICPA Professional Studies.

12 © 2020 Association of International Certified Professional Accountants