What standards were the auditors following when they conducted their audit of Beauty Bungalows?

According to Beauty Bungalows' 2025 Franchise Disclosure Document, the audit was conducted following specific standards. The Report of Independent Auditors states that the audit of Beauty Bungalows Franchising, LLC was performed in accordance with auditing standards generally accepted in the United States of America (GAAS). The auditor's responsibilities under these standards are detailed in a separate section of the report.

These standards require the auditors to be independent of Beauty Bungalows and to adhere to ethical requirements relevant to the audit. The auditors must obtain sufficient and appropriate audit evidence to provide a basis for their opinion. Their responsibilities include obtaining reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and issuing an auditor's report that includes their opinion.

In accordance with GAAS, the auditors must exercise professional judgment and maintain professional skepticism throughout the audit. They identify and assess the risks of material misstatement, design and perform audit procedures responsive to those risks, and examine evidence regarding the amounts and disclosures in the financial statements on a test basis. They also obtain an understanding of internal control relevant to the audit but do not express an opinion on the effectiveness of the company's internal control. The auditors evaluate the appropriateness of accounting policies used, the reasonableness of significant accounting estimates made by management, and the overall presentation of the financial statements. Finally, they conclude whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern.