What is Econometrics? Econometrics is a field in economics that helps economists quantify economic theories. Historically, most economists only relied on economic theories and hypotheses. However, some of these theories were unproven due to the lack of quantified information available. With econometrics, economists were finally able to test those theories …

When you hear the word “enterprise,” what springs to mind? Maybe a big company like Coca-Cola or IBM. Rarely do people think of an enterprise as being their own business? But in fact, every small business is also an enterprise. The thing that differentiates a small business from other types …

The primary objective of most audit assignments is for the auditor to express an opinion regarding the subject matter. Usually, they report it in a document known as the audit report. The term audit opinion defines a statement provided by auditors about a given subject matter. This opinion may differ …

Fallen Angel’s investment strategy is a type of aggressive investment strategy, which has the potential to yield high returns. At the same time, it also entails high risk for investors. These investments are often made by venture capitalist firms in startup companies that have failed to get off the ground …

Corporate governance is a system of practices, rules, and processes by which companies are directed and controlled. It provides a framework for companies to achieve their objectives. Corporate governance defines several rules and practices that help companies run effectively and efficiently. Among these, corporate governance requires companies to establish several …

Hedge fund investment is a type of private equity. Hedge funds are less regulated than mutual funds, and traditionally do not have the same liquidity requirements as other investments. They invest in stocks, bonds, currencies, commodities, and derivatives, which offer high-risk/high-return potential. Due to this high-risk factor, it is important …

An audit approach defines the strategy that auditors use to conduct an audit. Usually, auditors use a specific audit approach for every audit assignment based on several factors. Among these approaches, some may apply to clients or engagements in different industries. One of these includes the substantive audit approach, also …

Hedge funds are investment pools that represent a variety of investments, including stocks and other securities. Diversification is the act of investing in multiple assets to reduce risk exposure from any one asset. Hedge funds may be an effective means for investors to increase their diversified portfolios without having to …

What is a Foreign Exchange Gain and Loss? Most companies or businesses deal in various currencies due to the nature of their operations. It may include transacting with foreign suppliers or customers, overseas operations, foreign investments, etc. Usually, companies incur a gain or loss on each transaction due to variations …

With external audits, auditors examine a client’s financial statements. These financial statements primarily include the balance sheet and the income statements. Usually, auditors employ an audit approach such as substantive procedures or a system-based approach for these audits. Sometimes, however, auditors may focus on the balance sheet only. In that …