What is the auditor's objective in auditing the financial statements of Afuri Ramen Dumpling?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 FDD, the auditor's objective is to provide reasonable assurance that the financial statements of Afuri Ramen Dumpling are free from material misstatement. This means the auditor aims to gather sufficient evidence to be reasonably confident that the financial statements accurately reflect the company's financial position and performance. The audit is conducted in accordance with auditing standards generally accepted in the United States of America.
The auditor's work involves planning and performing procedures to obtain audit evidence regarding the amounts and disclosures in the financial statements. These procedures are selected based on the auditor's judgment, including an assessment of the risks of material misstatement, whether due to fraud or error. The auditor also considers Afuri Ramen Dumpling's internal control relevant to the preparation and fair presentation of the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
Furthermore, the auditor evaluates the appropriateness of the accounting policies used by Afuri Ramen Dumpling's management and the reasonableness of significant accounting estimates made by management. The auditor also assesses the overall presentation of the financial statements to ensure they are clear, consistent, and in accordance with accounting principles generally accepted in the United States of America. Ultimately, the auditor's goal is to express an opinion on whether the financial statements present fairly the financial position, results of operations, and cash flows of Afuri Ramen Dumpling.