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. Independent Auditor

    A certified public accountant who examines the financial records ...
  3. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  5. Auditor's Opinion

    A certification that accompanies financial statements and is ...
  6. Auditor's Report

    Recorded in the annual report, the auditor's report tests to ...
RELATED FAQS
  1. What are some of the key differences between IFRS and U.S. GAAP?

    The International Financial Reporting Standards (IFRS) - the accounting standard used in more than 110 countries - has some ... Read Full Answer >>
  2. How does transfer pricing help business?

    Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >>
  3. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  4. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
  5. How does quantifying fixed overhead volume variance show whether a company is profitable ...

    Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >>
  6. What does inventory turnover tell an investor about a company?

    The inventory turnover ratio determines the number of times a company's inventory is sold and replaced over a certain period. ... Read Full Answer >>
Related Articles
  1. Markets

    Material Adverse Effect A Warning Sign For Stocks

    Learn what this phrase means and how to spot it in a company's financial statements.
  2. Investing Basics

    The Flow Of Company Information

    Learn how to gather all the pieces before you start to put together your puzzle.
  3. Investing

    Off-Balance-Sheet Entities: An Introduction

    The theory and practice of these entities varies greatly. Investors need to learn what they're getting into.
  4. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  5. Investing Basics

    Explaining Write-Downs

    A write-down is a reduction in the book value of an asset because it is overvalued compared to the market value.
  6. Economics

    What are Noncurrent Assets?

    Noncurrent assets are property that a company owns that will last for more than one year.
  7. Investing Basics

    How Much Do CPAs Make?

    If you're considering becoming a CPA, here's what you might expect to earn.
  8. Economics

    Explaining Activity-Based Costing

    Activity-based costing (ABC) is a managerial accounting method that assigns certain indirect costs to the products incurring the bulk of those costs.
  9. Economics

    What is a Contra Account?

    A contra account is an offset that reduces the value of a related account.
  10. Fundamental Analysis

    What is Quantitative Analysis?

    Quantitative analysis refers to the use of mathematical computations to analyze markets and investments.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center