The Medical Practice Walkthrough – A Necessity?

Dr. David E. Marcinko MBA

The most effective means for any professional appraiser to confirm his or her understanding of business value, and how internal controls over financial and managerial reporting is designed and operated in a medical practice, is to evaluate and test its effectiveness.

This includes making inquiries about and observing the personnel who actually perform the managerial duties and controls; reviewing documents that are used in – and that result from – the application of the controls; and comparing supporting documentation to the accounting records.

In performing an onsite office walkthrough, professional valuators examine and review transactions in a medical practices information system to the point where it is reflected in the company’s financial reports.

Practice onsite walkthroughs provide the valuator with evidence to:

·Confirm the medical process flow of transactions

·Understand the management design components of a medical practice valuation related to the prevention or detection of fraud, over utilization, excessive expenses, etc

 · Learn about office workforce processes by determining whether points at which misstatements related to each relevant financial statement assertion that could occur have been identified

·Document whether office controls have been placed in operation.

Of course, an onsite walk-through is the premier component of any comprehensive medical practice valuation engagement.

CONCLUSION: What are your thoughts on onsite valuation visits; pro or con?

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

Invite Dr. Marcinko

Filed under: Practice Worth | Tagged: business appraisals, valuation |