Professional skepticism in the business valuation
Studies in the United States and Indonesia
Bibliographic Data
| ID | 22189853 |
|---|---|
| Authors | Tarsisius Catur Budi Nugraha, Tarsius Catur Budi Nugraha (Universitas Gadjah Mada), I Wayan Nuka Lantara (Universitas Gadjah Mada), Tandelilin Eduardus, Eduardus Tandelilin (0000-0001-9156-9283, Universitas Gadjah Mada), Bowo Setiyono (0000-0001-6976-2714, Universitas Gadjah Mada) |
| Year | 2024 |
| Volume | 8 |
| Issue | 8 |
| Pages | 7036 |
| Publication date | 2024-08-29 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Infrastructure Policy and Development (JOURNAL) |
| Journal identifiers | ISSN: 2572-7923 • E-ISSN: 2572-7931 |
| Publisher | EnPress Publisher (PUBLISHER) |
| DOI | 10.24294/jipd.v8i8.7036 |
| OpenAlex | W4402021850 |
| Language | EN |
| References cited | 6 |
Professional judgments in business valuation should be based on persuasive comparative data and conclusive empirical studies. However, these judgments are frequently made without these conditions, causing professional skepticism. An appraiser should explain in detail what was done to get the market value because valuation is the initial crucial step in the investment decision process. In socially responsible investment schemes, an appraiser has a fiduciary duty and a vital role in protecting the public from fraud and the risk of asset value destruction. Professional skepticism is essential to direct the appraiser’s judgment towards independent valuation for the public interest, assisting in evaluating the relevance and reliability of information, especially relating to social, environmental, and ethical issues. This paper studies the business valuation process from a behavioral finance perspective in the United States and Indonesia, aiming to tweak business valuation practices, identify biases, and mitigate them to ensure the market value does not shift far from fairness opinion. The case study explores experiences from the professional role-learning process. The results highlight the need for an appraisal protocol in business valuation, improvements in the discount for lack of marketability application, and these findings are pertinent to business appraisers and regulators. Recommendations include enhancing the clarity of professional judgments and the integration of recent empirical studies into practice
Actuarial science · Business · Business valuation · Duty · Economics · Empirical research · Fair market value · Fiduciary · Political science · Skepticism · Auditing, Earnings Management, Governance · Corporate Finance and Governance · Financial Markets and Investment Strategies · Law · Accounting
| Highly cited | No |
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