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Hi guys,
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 you are the auditor and your client indicates that they will only accept an unqualified report, that is an attempt to intimidate you into giving them what they want, since if they cannot get the assurance that you will issue a clean report then they may take their business elsewhere.
In my opinion the intimidation will come after they have got different audit opinion from second auditor.
E.g. the first auditor give an adverse opinion to his client financial statement and the management disagree with this opinion and went to get second opinion fro another firm to confirm whether the auditor opinion is correct or not. The client give limited information and based on that the second auditor may say it is incorrect. Now the client management will take this second opinion and asked the first auditor to amend the opinion because of the second auditors opinion.
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