ACCOUNTING RATIO Definition

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ACCOUNTING RATIO is the result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.

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DETECTION RISK is the risk that audit procedures will lead to a conclusion that material error does not exist when in fact such error does exist.

FINANCIAL STATEMENT is a written report which quantitatively describes the financial health of a company. This includes an income statement and a balance sheet, and often also includes a cash flow statement. Financial statements are usually compiled on a quarterly and annual basis.

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