During an audit, is professional skepticism required when exercising professional judgment for Boulder Designs?

According to Boulder Designs' 2025 Franchise Disclosure Document, when performing an audit in accordance with Generally Accepted Auditing Standards (GAAS), the auditor must exercise professional judgment and maintain professional skepticism throughout the audit. This means the auditor should have a questioning mind and critically assess the audit evidence.

This requirement ensures that the auditor approaches the audit with an objective mindset, rather than assuming that the financial statements are automatically correct. Professional skepticism involves considering the reliability of the information provided by management and looking for any indications of potential misstatements, whether due to fraud or error.

For a prospective Boulder Designs franchisee, this implies that the company's financial statements have been rigorously examined by an independent auditor who is trained to identify potential risks and misstatements. This can provide a level of comfort that the financial information presented by Boulder Designs is fairly stated and reliable. The audit also includes evaluating the appropriateness of accounting policies and the reasonableness of significant accounting estimates made by management.