What is the auditor's responsibility regarding the overall presentation of Aw's financial statements?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Rayyan Pizza Franchise 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 Rayyan Pizza Franchise LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the auditor has specific responsibilities concerning the overall presentation of the financial statements. As part of their audit, the auditor evaluates the appropriateness of the accounting policies used by Aw's management and the reasonableness of significant accounting estimates made by them. This evaluation extends to the overall presentation of the financial statements to ensure they are fairly presented.
In addition to evaluating the presentation, the auditor's responsibilities include exercising professional judgment and maintaining professional skepticism throughout the audit. They identify and assess the risks of material misstatement in the financial statements, whether due to fraud or error, and design audit procedures to respond to these risks. These procedures involve examining evidence regarding the amounts and disclosures in the financial statements on a test basis.
The auditor also obtains an understanding of Aw's internal control relevant to the audit to design appropriate audit procedures. However, the auditor does not express an opinion on the effectiveness of Aw's internal control. Furthermore, the auditor concludes whether there are conditions or events that raise substantial doubt about Aw's ability to continue as a going concern for a reasonable period of time.
These responsibilities are conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). The auditor's objectives are to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion.