Best Practices

AAA

DEFINITION of 'Best Practices'

A set of guidelines, ethics or ideas that represent the most efficient or prudent course of action. Best practices are often set forth by an authority, such as a governing body or management, depending on the circumstances. While best practices generally dictate the recommended course of action, some situations require that such practices be followed.

INVESTOPEDIA EXPLAINS 'Best Practices'

Best practices serve as a general outline for a variety of situations. For instance, in the production process, a list of best practices may be given to employees, highlighting the most efficient way to complete their tasks. For accountants, the Generally Accepted Accounting Principles represent best practices for the profession. An investment manager may follow best practices when managing a client's money by prudently investing in a well-diversified portfolio.

RELATED TERMS
  1. Silo Mentality

    An attitude found in some organizations that occurs when several ...
  2. Market-Based Corporate Governance ...

    A system relying on the investors of a firm to exert control ...
  3. Corporate Governance

    The system of rules, practices and processes by which a company ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  5. Generally Accepted Auditing Standards ...

    A set of systematic guidelines used by auditors when conducting ...
  6. Best Efforts

    An agreement in which an underwriter promises to make a full-fledged ...
Related Articles
  1. Shopping For A Financial Advisor
    Options & Futures

    Shopping For A Financial Advisor

  2. 10 Tips For The Successful Long-Term ...
    Trading Strategies

    10 Tips For The Successful Long-Term ...

  3. Policing The Securities Market: An Overview ...
    Investing Basics

    Policing The Securities Market: An Overview ...

  4. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center