When conducting an audit for Burneys Sweets More, what level of judgment and skepticism should be exercised?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
1
In performing an audit in accordance with generally accepted auditing standards, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or\nerror, and design and perform audit procedures responsive to those risks. Such procedures include\nexamining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit 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 DMG Burney Inc.'s internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting\nestimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about DMG Burney, Inc.'s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Thompson, Price. Scott. Adams & Co., PA
Elizabethtown, North Carolina April 9, 2025
ITEM 22.
Source: Item 23 — RECEIPT (FDD pages 50–199)
What This Means (2025 FDD)
According to the 2025 FDD, when performing an audit for Burneys Sweets More in accordance with generally accepted auditing standards, auditors must exercise professional judgment and maintain professional skepticism throughout the audit. This involves identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, and designing and performing audit procedures responsive to those risks. These procedures include examining evidence regarding the amounts and disclosures in the financial statements on a test basis.
Auditors also need to understand internal control relevant to the audit to design appropriate audit procedures, though not for the purpose of expressing an opinion on the effectiveness of Burneys Sweets More's internal control. The audit also requires 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.
Furthermore, auditors must conclude whether there are conditions or events that raise substantial doubt about Burneys Sweets More's ability to continue as a going concern for a reasonable period of time. They are also required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. This ensures a thorough and critical review of the financial statements and related disclosures.