What are Threats to Auditor Independence? In the auditing profession, there are five major threats that may compromise an auditor’s independence. Before an audit engagement, it is crucial that each member of the audit team review the five threats to independence. If an auditor is exposed to a certain threat, he or she should either…
What are Unexpected Earnings? “Unexpected earnings” is the term used in accounting to address the difference between a company’s actual earnings for a period and the earnings they were expected to generate. It is also sometimes referred to as an “earnings surprise.” The “unexpected” aspect can be either positive – meaning the company generated more…
What is Days of Inventory on Hand (DOH)? Days of Inventory on Hand (DOH) is a metric used to determine how quickly a company utilizes the average inventory available at its disposal. It is also known as days inventory outstanding (DIO) and is interpreted in a number of ways. Since it’s used to determine the…
What is Form 1040-EZ? Form 1040-EZ is a federal income tax form that was offered by the Internal Revenue Service (IRS) up through tax year 2017. Many American taxpayers used the form to file and report their federal income taxes for the year. Form 1040-EZ was discontinued, along with Form 1040-A, in 2018. Beginning in…
What is the Trailing P/E Ratio? The trailing price to earnings ratio – trailing P/E ratio – is the most commonly used of the P/E variations (trailing versus forward). The trailing P/E ratio accounts for a company’s actual earnings instead of its projected earnings. It is considered one of the most accurate ways of determining…
What are Gridlines in Excel? Gridlines in Excel are the horizontal and vertical gray lines that differentiate between cells in a worksheet. The gridlines guide users to differentiate between the specific cells and read the data in an organized manner. They also help users navigate through the worksheet columns and rows with ease. Without gridlines,…
What are Securitized Debt Instruments? Securitized debt instruments are financial securities that are created by securitizing individual loans (debt). Securitization is a financial process that involves issuing securities that are backed by a number of assets, most commonly debt. The assets are transformed into securities, and the process is called securitization. The owner of the…
What is Stock Performance Benchmarking? Stock performance benchmarking is a strategy employed by investors to help determine the different performance aspects of an investment portfolio. Investors typically use benchmarking to get a better assessment of a portfolio’s return, how risky it is as a whole, and how to allocate funds within the portfolio to minimize…
What is Freight Expense? Freight expense refers to the price that is charged by a carrier for sending out cargo from the source location to the destination location. The expense is paid by the person who wants the goods transported from one location to another. The amount of freight expense charged depends on the mode…
What are Credit Analyst Jobs? Credit analyst jobs encompass a wide range of positions. In general, a credit analyst is responsible for helping a lender or other financial institution – or even a potential employer – determine how risky it is to offer an applicant a loan or a line of credit. Anytime a company…
