What is the auditor's objective when auditing the financial statements of 1 800 Packouts?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
3300 N. Triumph Blvd., Suite 410, Lehi, UT 84043
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures\ninclude examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the\neffectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the auditor's primary objective is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. The auditor also aims to issue a report that includes their opinion on the financial statements. This assurance, while high, is not absolute, meaning that an audit does not guarantee the detection of every material misstatement. The auditor's responsibility includes exercising professional judgment and maintaining professional skepticism throughout the audit process. They identify and assess the risks of material misstatement, design and perform audit procedures responsive to those risks, and evaluate the appropriateness of accounting policies and the reasonableness of significant accounting estimates made by management.
The auditor's procedures involve examining evidence regarding the amounts and disclosures in the financial statements on a test basis. They also obtain an understanding of internal control relevant to the audit to design appropriate audit procedures, although they do not express an opinion on the effectiveness of the company's internal control. The auditor evaluates the overall presentation of the financial statements and concludes whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern for a reasonable period of time.
The auditor is required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. The auditor must remain independent of the company and meet ethical responsibilities relevant to the audit. The auditor believes that the audit evidence obtained is sufficient and appropriate to provide a basis for their audit opinion.