What does the auditor evaluate regarding accounting policies used by Beggars Pizza?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, 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 Beggars 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 Beggars 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 Beggars Pizza's 2025 Franchise Disclosure Document, the auditor evaluates the appropriateness of the accounting policies used by the company. This evaluation is part of a broader audit performed in accordance with generally accepted auditing standards. The auditor also assesses the reasonableness of significant accounting estimates made by management and the overall presentation of the financial statements.
This means the auditor reviews whether Beggars Pizza's chosen accounting methods are suitable for their business and comply with standard accounting practices. They also check if the estimates made by the management, which affect the financial statements, are reasonable. This process aims to ensure that the financial statements provide a fair and accurate view of the company's financial position.
For a prospective franchisee, this indicates that Beggars Pizza's financial statements are subject to scrutiny by an independent auditor. The auditor's evaluation provides a level of assurance that the accounting practices are appropriate and the financial statements are fairly presented. This can be important for making informed investment decisions, as it suggests that the financial information provided by Beggars Pizza has been vetted by an objective third party.