Opinion Shopping

AAA

DEFINITION of 'Opinion Shopping'

The practice of searching for an outside auditor who will provide an unqualified accountant's opinion. Opinion shopping is practiced by some firms in order to receive a positive opinion of the company's financial records. An accountant's opinion (also called auditor's certificate) is intended to show that the company's financials are fairly presented and that they conform to the generally accepted accounting principles (GAAP). This opinion is important to lenders and investors who rely on independent views of a company's books and records when making decisions.

INVESTOPEDIA EXPLAINS 'Opinion Shopping'

Opinion shopping is a dubious practice that involves finding an auditor who will overlook any shortcomings in the company's financial reporting. An accountant's opinion can be qualified or unqualified. If the opinion is qualified, the accountant has questions about the company's accounting principles and/or the scope of the information provided. When a company goes opinion shopping, it is seeking an unqualified opinion that finds the company's financial statements to be fairly presented, in all material respects, and in accordance with GAAP. An unqualified opinion is the most common type of accountant's opinion.

RELATED TERMS
  1. Compulsive Shopping

    An unhealthy obsession with shopping that materially interferes ...
  2. Auditor's Opinion

    A certification that accompanies financial statements and is ...
  3. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  4. Auditor's Report

    Recorded in the annual report, the auditor's report tests to ...
  5. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  6. Independent Auditor

    A certified public accountant who examines the financial records ...
Related Articles
  1. Material Adverse Effect A Warning Sign ...
    Markets

    Material Adverse Effect A Warning Sign ...

  2. The Flow Of Company Information
    Investing Basics

    The Flow Of Company Information

  3. Off-Balance-Sheet Entities: An Introduction
    Investing

    Off-Balance-Sheet Entities: An Introduction

  4. What are some of the key differences ...
    Professionals

    What are some of the key differences ...

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center