What standards were the Benihana audits conducted in accordance with?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company's financial statements were audited in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB). These standards require that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The audit includes assessing the risks of material misstatement of the financial statements, examining evidence regarding the amounts and disclosures in the financial statements on a test basis, evaluating the accounting principles used and significant estimates made by management, and evaluating the overall presentation of the financial statements.
The PCAOB standards are specific to audits of public companies, indicating that Benihana's financial statements are prepared with a high degree of scrutiny and in accordance with widely recognized and respected auditing standards. This can provide potential franchisees with confidence in the financial information provided by Benihana.