opinion shopping

Opinion shopping

Attempts by a corporation to attain reporting objectives by following questionable accounting principles, with the help of an auditor willing to sanction the practices. Prohibited by the SEC.

Opinion Shopping

The act or practice of a company looking for an auditor who is likely to give an undeservedly good report on that company's financial health. The company may opinion shop for an auditor with unscrupulous ethics or perhaps who is simply not very good. Opinion shopping is illegal and as a result some analysts raise questions when a company suddenly changes its auditor.

opinion shopping

The search for an accounting firm that will provide the desired opinion for a financial statement. Firms sometimes opinion shop when their current auditors consider their accounting practices questionable or unacceptable. Investors should spend extra time investigating firms that have recently changed auditors.
References in periodicals archive ?
For example, holding all else equal, audit firm dismissals during the fieldwork stage of the audit are more likely to reflect client opinion shopping than are dismissals during other stages of the financial reporting process.
Fritz expects a great deal of scrutiny from investigators on Lehman's opinion shopping and says it could raise problems for the defunct company's former in-house lawyers.
When first addressed by the Securities and Exchange Commission (SEC) as a means to curtail opinion shopping, Form 8-K filings were required only when there was a disagreement between a company and its auditors.
Evidence on opinion shopping from audit opinion conservatism.
Previous research suggests that opinion shopping is generally unsuccessful (e.
Matt Howell, Deloitte's technical partner, says his firm would not get involved in opinion shopping, and it is already implementing IAS 29 where applicable.
To deter opinion shopping and ensure that opinions are based on the actual facts of a transaction rather than unjustified assumptions, the scope of the reasonable cause exception should be clarified.
Further, it may be easier for lenders to go opinion shopping for another appraiser if the desired value change is small, as conservative assumptions are more easily justifiable than a large value change.
He emphasized that audit committees' responsibility goes beyond ensuring they're not opinion shopping, which is illegal.
The book discusses many of the significant controversies of Chenok's time: accountants' legal liability, government investigation, preservation of self-regulation, changes in the code of professional conduct, opinion shopping, commissions and contingent fees, proper financial reporting, the role of FASB, standards overload, specialization and accreditation, accounting education, minority involvement, and the scope of services.
The practice of opinion shopping may adversely affect the perception of audit constituencies about the independent audit function, and thus the credibility of the accounting profession.
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