Auditor

  

Public companies have to present financial results to their shareholders. These numbers get reviewed by a theoretically neutral third party. The process of reviewing the finances is known as an audit and the person doing the audit is known as (no prize for getting this one)...the auditor.

Typically an auditor isn't a single person (that would be one overworked schlub). Instead, it's usually an accounting firm hired by the company.

As we noted before, these auditing firms are supposed to be neutral observers. Kind of like a referee in a sport. But the auditors get hired by the company being audited, receive a check from the company being audited and want to stay employed by the company being audited. Conflict of interest issues sometimes come to the surface.

For the most part, though, auditors provide shareholders with improved security. An auditor's stamp of approval lets investors know that the company's publicly released results accurately describes what's going on at the company.

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Finance: What is Acting Against Recommen...2 Views

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finance a la shmoop what is acting against recommendations hmm

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let's say you head to the emergency room with stomach pains the doctor in charge [Man driving fast with stomach pains]

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says yep you've got appendicitis but I'm brutally

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tired so I recommend you go home well odds are if the doc himself had [Doctor in pain with stomach pains]

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appendicitis he'd get someone to take that puppy out stat acting against

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recommendations is kind of like that just in the financial world if your

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broker tells you to do something he wouldn't recommend for his own [Man discussing finance with his broker]

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investments well he has a duty to tell you that he wouldn't do that same thing

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in his own case that usually happens when some bonehead tells a broker, hey I

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want to bet my life savings on this new IPO well why would anyone act against

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recommendations well in the case of the doc maybe he's so tired that he's a [Doctor holding scalpel and falls to the floor]

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dangerous menace in the O.R... In the case of your broker well maybe there's

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something about your specific situation that makes acting against recommendation

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the way to go well as long as they tell you that it's against recommendations

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well, they're legally in the cure just don't ask that broker to perform

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your kidney transplant [Broker walks into office]

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