What evaluations are performed by the auditors regarding Alloy's accounting policies and financial statement presentation?

According to Alloy's 2025 Franchise Disclosure Document, the auditors evaluate the appropriateness of the accounting policies used by Alloy's management. They also assess the reasonableness of significant accounting estimates made by the management team. Furthermore, the auditors evaluate the overall presentation of Alloy's financial statements to ensure they are fairly presented.

In addition to evaluating accounting policies and financial statement presentation, the auditors also aim to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. To achieve this, they identify and assess the risks of material misstatement of the financial statements, and design and perform audit procedures responsive to those risks. These procedures include examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

The auditors also obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate for the circumstances. However, the audit is not for the purpose of expressing an opinion on the effectiveness of Alloy's internal control, and accordingly, no such opinion is expressed. The auditors also conclude whether there are conditions or events that raise substantial doubt about Alloy's ability to continue as a going concern for a reasonable period of time.