When auditing Bojangles' consolidated financial statements, what must auditors conclude regarding the company's ability to continue as a going concern?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
operations, of stockholder's equity and of cash flows for each of the three years in the period ended December 29, 2024, including the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 29, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 29, 2024 in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date the consolidated financial statements are available to be issued.
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles' 2025 Franchise Disclosure Document, when preparing the consolidated financial statements, management must evaluate whether any conditions or events, when considered together, raise significant doubt about Bojangles' ability to continue operating as a going concern for one year after the consolidated financial statements are issued.
Furthermore, the auditors are responsible for concluding whether, in their judgment, there are conditions or events that raise substantial doubt about Bojangles' ability to continue as a going concern for a reasonable period of time. This evaluation is a critical part of the audit process, ensuring that the financial statements provide an accurate representation of the company's financial health and stability.
This assessment is crucial for prospective franchisees because it speaks directly to the stability and long-term viability of Bojangles. A negative assessment, indicating doubt about the company's ability to continue as a going concern, could signal significant financial risks for franchisees. Conversely, a positive assessment provides reassurance about the financial health of the franchisor.