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Hi sir,
It is essential to assess the integrity of a new client as soon as possible to establish if they are likely to be opinion shopping. (This is an intimidation threat)
I am wondering why opinion shopping is an intimidation threat.Even though I got the definition of opinion shopping, I am still confused about the threat.
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.
If a client doesn’t like the (presumably qualified) opinion that the existing auditors are proposing, then the client may tell the existing auditor that they (the client) is going ‘opinion shopping’
This is intimidation – it’s a threat that the client is prepared to forego the services of the existing auditor and find someone that will be prepared to give an opinion that the client finds acceptable
The threat of the loss of any client (and the consequent loss of income from that client) can be seen as intimidation
Loss of any income hurts the auditor!
OK?
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