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.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

References in periodicals archive ?

Clients, prospects, friends, or family members may sometimes engage in "opinion shopping." CPAs should be wary when it becomes clear that a second opinion is being sought regarding a tax matter.

Avoiding allegations of improper tax advice: casual advice creates big exposure for malpractice claims

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.

Audit firm changes post-Sarbanes Oxley: impact on the market for public company audits

A 2002 study estimated that "opinion shopping" was behind 17% of auditor switches in the late 1990s, with most of these tending to occur later in the fiscal year.

Shedding new light on auditor switching: this article is based on a study supported by the IMA[R] foundation for applied research (FAR)

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.

Blaming Lehman: newly released report shows how accounting trickery led to firm's demise

He specifically suggested that they set a threshold confidence level for taking a tax position and discourage or eliminate "opinion shopping" by tax departments by allowing an independent tax firm to have direct dialogue with the board of directors and review major tax positions.

IRS initiatives could change compliance landscape in 2010

* Discouraging or eliminating opinion shopping by tax departments by having an independent tax firm, which has some direct dialogue with the board of directors, review major tax positions.

Commissioner Shulman's conversation with the boardroom

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.

Is it time to revise 8-K rules on auditor changes? Announcing an auditor change can raise red flags, even though such concerns may be unwarranted. In this era of increasing transparency, 8-Ks that also include the reasons for change can allay negative assumptions

Previous research suggests that opinion shopping is generally unsuccessful (e.g., Chow and Rice 1982; Smith 1986; Krishnan and Stephens 1995; Geiger et al.

Audit committee characteristics and auditor dismissals following "new" going-concern reports

Its opponents fear the move may lead to Russian companies engaging in "opinion shopping" or threatening to change auditors to ensure a more favourable treatment in the preparation of their 2000 audited accounts).

RUSSIA - Feb. 5 - 'Big Five' Audit Firm Split On Standard

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.

How client pressure affects the appraisal of residential property

He emphasized that audit committees' responsibility goes beyond ensuring they're not opinion shopping, which is illegal.

PCAOB set to expand under new mandates: an interview with Chairman James R. Doty