What aspects of accounting policies and estimates should be evaluated during an Amorino audit?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
d 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 GAAS, we:
- 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 include 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 effectiveness of CPUSA LLC's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about CPUSA LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, an audit should evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as the overall presentation of the financial statements. This includes exercising professional judgment and maintaining professional skepticism throughout the audit to identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and designing and performing audit procedures responsive to those risks.
Specifically, the audit would involve examining evidence regarding the amounts and disclosures in the financial statements on a test basis. It also requires obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. However, the audit does not express an opinion on the effectiveness of CPUSA LLC's internal control.
Furthermore, the audit should conclude whether there are conditions or events that raise substantial doubt about CPUSA LLC's ability to continue as a going concern for a reasonable period. The auditors are also 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.