What should be evaluated regarding accounting when auditing Aira Fitness's financial statements?

According to Aira Fitness's 2025 Franchise Disclosure Document, the audit of financial statements should identify and assess the risks of material misstatement, whether due to fraud or error. The audit procedures should be responsive to these risks, including examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

Specifically, Aira Fitness requires franchisees to use a bookkeeping, accounting, and record-keeping system that the franchisor prescribes. Franchisees must submit periodic reports, forms, and records as specified in the Operations Manual. Aira Fitness retains the right to require franchisees to use a standard Chart of Accounts for tracking income and expense items and to have a fiscal year-end of December 31 to ensure uniform financial statements.

For a period of five years from the date of preparation, franchisees must keep on file at their principal office and make available to Aira Fitness all records, including receipts, invoices, payroll records, check stubs, bank deposit receipts, sales tax records and returns, business and personal tax returns, and journals and transactions summarizing the business operations. Franchisees also grant Aira Fitness permission to access all electronic records maintained in required Technology Systems. Aira Fitness also has the right to enter the Aira Fitness Business at any time to inspect and audit business operations, records, and reports, excluding employment records for employees, without prior notice.