AUDIT FAILURE Definition

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AUDIT FAILURE is an instance where the auditor said that the financial statements were fairly stated when in fact, they were not.

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SPONTANEOUS ASSETS are assets that arise automatically, in the course of operating a company day-to-day, when a company purchases assets and they are delivered.

PRICE TO EARNINGS RATIO (P/E) is a performance benchmark that can be used as a comparison against other companies or within the stocks own historical performance. For instance, if a stock has historically run at a P/E of 35 and the current P/E is 12, you may want to explore the reasons for the drastic change. If you believe that the ratio is too low, you may want to buy the stock. You will generally find a P/E ratio based on either the prior reporting years earnings, or the earnings of the prior four quarters added together (LTM or Latest Twelve Months). Formula: Stock Price divided by the Earnings Per Share.

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