What is the auditor's responsibility regarding 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the auditor has specific responsibilities concerning the presentation of the company's financial statements. The auditor's role is to evaluate the appropriateness of the accounting policies used by Bombs Away's management and assess the reasonableness of significant accounting estimates made by them. Additionally, the auditor is responsible for evaluating the overall presentation of the financial statements to ensure they are fairly presented.
To fulfill these responsibilities, the auditor conducts the audit in accordance with auditing standards generally accepted in the United States of America. These standards require the auditor to plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement. This involves performing procedures to gather audit evidence about the amounts and disclosures in the financial statements. The selection of these procedures depends on the auditor's judgment, including an assessment of the risks of material misstatement, whether due to fraud or error.
In making risk assessments, the auditor considers Bombs Away's internal control relevant to the preparation and fair presentation of the financial statements. This consideration is to design audit procedures that are appropriate for the circumstances, but it is not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Therefore, the auditor does not express an opinion on the effectiveness of Bombs Away's internal controls. The auditor's report includes their opinion on whether the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of Bombs Away in accordance with accounting principles generally accepted in the United States of America.