What is the auditor's responsibility in evaluating the accounting policies used by management in Body20's financial statements?

According to Body20's 2025 Franchise Disclosure Document, the auditor has specific responsibilities in evaluating the accounting policies used by the company's management. These responsibilities are part of a broader audit conducted in accordance with generally accepted auditing standards (GAAS). The auditor's role is to evaluate whether the accounting policies selected by management are appropriate and reasonable within the context of the financial statements. This includes assessing the consistency and clarity of these policies and whether they accurately reflect the underlying economic transactions and events of Sequel Brands Holdings, LLC.

Specifically, the auditor must evaluate the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management. Additionally, the auditor evaluates the overall presentation of the financial statements to ensure they are clear, consistent, and compliant with accounting standards. This involves a thorough review of how financial information is presented and disclosed, ensuring that it provides a fair and accurate view of the company's financial position and performance. The auditor exercises professional judgment and maintains professional skepticism throughout the audit to identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error.

In performing these evaluations, the auditor examines evidence regarding the amounts and disclosures in the financial statements on a test basis. This means the auditor does not review every single transaction but instead selects a sample of transactions to gain reasonable assurance about the overall accuracy and reliability of the financial statements. The auditor also obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate for the circumstances. However, the auditor does not express an opinion on the effectiveness of Sequel Brands Holdings, LLC's internal control.

Ultimately, the auditor's objective is to form an opinion on whether the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of Sequel Brands Holdings, LLC in accordance with accounting principles generally accepted in the United States of America. This opinion is included in the auditor's report, which provides assurance to users of the financial statements, such as potential investors or lenders, about the reliability of the financial information.