Basics
Content Category: Fundamentals/Company Reported Data
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Credit Suisse’s Accounting Quality (CSAQ) helps investors bring accounting quality into their investment process by systemically identifying potential risks across their holdings using a 100% quantitative approach.
The underlying data is powered by HOLT, a team renowned for its quality of data and expertise in adjusting reported financial data to remove accounting distortions and enable investors to better understand the true operating fundamentals and valuation of a company. CSAQ is used by top investment banks and hedge funds and can be a critical piece to any investment process.
HOLT’s comprehensive global data covers publicly traded companies in developed and emerging markets.
Data Overview
Asset Class: Public Companies
Data Frequency: Weekly/Monthly
Delivery Frequency: Weekly/Monthly
History: Data available back to 1990
Data Methodology
Credit Suisse’s Accounting Quality Score provides an overall score for each company that is based on hundreds of financial line items/ratios across four categories and 15 subcategories, including Accounts Receivable, Inventory, Stock Compensation, Special Items & Non-GAAP EPS, and Intangibles. The weighted average of the 15 subcategory scores is the Overall Accounting Score. Users can pull the overall accounting quality factor or any of the 15 subcategories for any company.
The Accounting Quality Framework was developed by highly qualified Credit Suisse Research team members (CPAs and CFAs) that have a long working history in accounting, audit, corporate consulting, and company valuation models. The categories are based on this collective experience as well as studying research and the reasons behind thousands of historical accounting restatements. In recognition of this unique framework, the following patent was granted by the U.S. government to Credit Suisse in July 2012: “System and method for identifying accounting anomalies to help investors better assess investment risks and opportunities.”
Use Cases
Fundamental Analysis
- Access a comparison of companies based on operational profitability and valuation metrics that are cash-focused and adjusted to remove accounting distortions to provide comparability across regions, sectors, time, and accounting standards.
Risk Control
- Identify companies that are at operational or valuation risk using an independent, discounted cash-flow based framework that is unbiased.
The details provided above are as of January 2021.
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