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Financial Terms | |
Opinion shopping |
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Definition of Opinion shoppingOpinion shoppingA practice prohibited by the SEC which involves attempts by a corporation to obtain
Related Terms:Clean opinionAn auditor's opinion reflecting an unqualified acceptance of a company's financial statements. Disclaimer of opinionAn auditor's statement disclaiming any opinion regarding the company's financial Except for opinionAn auditor's opinion reflecting the fact that the auditor was unable to audit certain areas ShoppingSeeking to obtain the best bid or offer available by calling a number of dealers and/or brokers. Subject to opinionAn auditor's opinion reflecting acceptance of a company's financial statements subject to Clean FloatA flexible exchange rate system in which the government does not intervene. Clean priceBond price excluding accrued interest. ![]() Flat price (also clean price)The quoted newspaper price of a bond that does not include accrued interest. AccountingA collection of systems and processes used to record, report and interpret business transactions. accountingA broad, all-inclusive term that refers to the methods and procedures Accounting and Auditing Enforcement Release (AAER)Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the SECurities laws. Accounting changeAn alteration in the accounting methodology or estimates used in Accounting earningsEarnings of a firm as reported on its income statement. Accounting entityA business for which a separate set of accounting records is being Accounting equationThe representation of the double-entry system of accounting such that assets are equal to liabilities plus capital. Accounting equationThe formula Assets = Liabilities + Equity. ![]() accounting equationAn equation that reflects the two-sided nature of a Accounting ErrorsUnintentional mistakes in financial statements. Accounted for by restating Accounting exposureThe change in the value of a firm's foreign currency denominated accounts due to a Accounting insolvencyTotal liabilities exceed total assets. A firm with a negative net worth is insolvent on Accounting IrregularitiesIntentional misstatements or omissions of amounts or disclosures in Accounting liquidityThe ease and quickness with which assets can be converted to cash. Accounting periodThe period of time for which financial statements are produced – see also financial year. Accounting PoliciesThe principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements. Accounting rate of return (ARR)A method of investment appraisal that measures accounting rate of return (ARR)the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow Accounting systemA set of accounts that summarize the transactions of a business that have been recorded on source documents. ![]() Accrual accountingThe recording of revenue when earned and expenses when accrual-basis accountingWell, frankly, accrual is not a good descriptive Accruals accountingA method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred. Aggressive AccountingA forceful and intentional choice and application of accounting principles algorithma logical step-by-step problem-solving technique Articles of incorporationLegal document establishing a corporation and its structure and purpose. Asset-Backed SecuritiesBond or note SECured by assets of company. Asset-backed securityA SECurity that is collateralized by loans, leases, receivables, or installment contracts Auditor's reportA SECtion of an annual report containing the auditor's opinion about the veracity of the Available-for-Sale SecurityA debt or equity SECurity not classified as a held-to-maturity SECurity or a trading SECurity. Can be classified as a current or noncurrent investment depending on the intended holding period. Average accounting returnThe average project earnings after taxes and depreciation divided by the average Banker's acceptanceA short-term credit investment created by a non-financial firm and guaranteed by a Bankers AcceptancesA bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque. Bill and Hold PracticesProducts that have been sold with an explicit agreement that delivery Blue-chip companyLarge and creditworthy company. Book-entry securitiesThe Treasury and federal agencies are moving to a book-entry system in which SECurities are not represented by engraved pieces of paper but are maintained in computerized records at the Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Cash accountingA method of accounting in which profit is calculated as the difference between income CASH-FLOW STATEMENTA statement that shows where a company’s cash came from and where it went for a period of time, such as a year. Cash Flow statementA financial report that shows the movement in cash for a business during an accounting period. Change in Accounting EstimateA change in accounting that occurs as the result of new information Change in Accounting EstimateA change in the implementation of an existing accounting Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures Change in Reporting EntityA change in the scope of the entities included in a set of, typically, consolidated financial statements. Changes in Financial PositionSources of funds internally provided from operations that alter a company's Chicago Mercantile Exchange (CME)A not-for-profit corporation owned by its members. Its primary chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall financial strategy. common-size income statementIncome statement that presents items as a percentage of revenues. Company AcquisitionsAssets acquired to create money. May include plant, machinery and equipment, shares of another company etc. company cost of capitalExpected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations. Company-specific riskRelated: Unsystematic risk Companyspecific RiskSee asset-specific risk Conditional BuyerOne of two parties to a conditional sale agreement, the other being the conditional seller. Conditional SaleA type of agreement to sell whereby a seller retains title to goods sold and delivered to a purchaser until full payment has been made. Conditional Sale AgreementAn agreement entered into between a conditional buyer and a conditional seller setting out the terms under which goods change hands. Conditional sales contractsSimilar to equipment trust certificates except that the lender is either the Conditional SellerOne of two parties to a conditional sale agreement, the other being the conditional buyer. Constant dollar accountingA method for restating financial statements by reducing or ContangoA market condition in which futures prices are higher in the distant delivery months. Contract AccountingMethod of accounting for sales or service agreements where completion Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned Convention statementAn annual statement filed by a life insurance company in each state where it does Convertible securityA SECurity that can be converted into common stock at the option of the SECurity holder, Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningfinancial planning conducted by a firm that encompasses preparation of both CorporationA legal "person" that is separate and distinct from its owners. A corporation is allowed to own CorporationA legal entity, organized under state laws, whose investors purchase corporationBusiness owned by stockholders who are not personally cost accountinga discipline that focuses on techniques or Cost Accounting Standards Board (CASB)a body established by Congress in 1970 to promulgate cost accounting Cost company arrangementArrangement whereby the shareholders of a project receive output free of cost of goods manufactured (CGM)the total cost of the Cost of goods soldThe cost of merchandise that a company sold this year. For manufacturing companies, the cost of raw Cost of goods soldSee cost of sales. Cost of goods soldThe cost of the items that were sold during the current period. Cost of goods soldThe accumulated total of all costs used to create a product or service, Cost of goods soldThe charge to expense of the direct materials, direct labor, and costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Creative Accounting Practicesany and all steps used to play the financial numbers game, including Creative Acquisition AccountingThe allocation to expense of a greater portion of the price Cross-sectional approachA statistical methodology applied to a set of firms at a particular point in time. Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Debt securitiesIOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and Debt SecurityA SECurity representing a debt relationship with an enterprise, including a government Depository Trust Company (DTC)DTC is a user-owned SECurities depository which accepts deposits of Derivative securityA financial SECurity, such as an option, or future, whose value is derived in part from the Discount securitiesNon-interest-bearing money market instruments that are issued at a discount and Domestic International Sales Corporation (DISC)A U.S. corporation that receives a tax incentive for double-entry accountingSee accrual-basis accounting. Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Edge corporationsSpecialized banking institutions, authorized and chartered by the Federal Reserve Board Eligible bankers' acceptancesIn the BA market, an acceptance may be referred to as eligible because it is Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Equity SecurityAn ownership interest in an enterprise, including preferred and common stock. Except for opinionAn auditor's opinion reflecting the fact that the auditor was unable to audit certain areas Exchangeable SecuritySECurity that grants the SECurity holder the right to exchange the SECurity for the Exempt securitiesInstruments exempt from the registration requirements of the SECurities Act of 1933 or the Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |