What is the auditor's responsibility in evaluating the overall presentation of Bombs Away's financial statements?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the auditor's responsibilities include evaluating the overall presentation of the financial statements. This evaluation is part of a broader audit conducted in accordance with auditing standards generally accepted in the United States of America. The auditor's goal is to obtain reasonable assurance that the financial statements are free from material misstatement.
To achieve this, the auditor plans and performs the audit to gather sufficient evidence regarding the amounts and disclosures in the financial statements. The specific procedures are based on the auditor's judgment and risk assessment, considering potential misstatements due to fraud or error. The auditor also considers Bombs Away's internal controls relevant to the preparation and fair presentation of the financial statements, although the audit does not aim to express an opinion on the effectiveness of these internal controls.
In addition to evaluating the overall presentation, the auditor assesses the appropriateness of the accounting policies used by Bombs Away and the reasonableness of significant accounting estimates made by its management. The auditor then forms an opinion based on the audit evidence obtained. This entire process is intended to provide a basis for the auditor's opinion on whether the financial statements present fairly the financial position of Bombs Away.