Does the audit for Burros Fries assess the company's ability to continue as a going concern?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
In performing an audit in accordance with GAAS, 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 error, and design and perform audit procedures responsive to those risks. Such procedures include examining, 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 Burros & Fries Franchise, Inc.'s internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates 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 Burros & Fries Franchise, 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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 FDD, the audit conducted on Burros & Fries Franchise, Inc.'s financial statements does include an assessment of the company's ability to continue as a going concern. As part of the audit process, the auditor is required to evaluate whether there are conditions or events that raise substantial doubt about the company's ability to continue operating for a reasonable period of time. This assessment is a standard part of an audit conducted in accordance with generally accepted auditing standards (GAAS).
Specifically, the auditor must conclude whether, in their judgment, there are conditions or events that, when considered in the aggregate, raise substantial doubt about Burros & Fries Franchise, Inc.'s ability to continue as a going concern for a reasonable period of time. This involves evaluating the appropriateness of accounting policies, the reasonableness of significant accounting estimates made by management, and the overall presentation of the financial statements.
Furthermore, the auditor's responsibilities include communicating with those charged with governance regarding the planned scope and timing of the audit, any significant audit findings, and certain internal control-related matters identified during the audit. This communication ensures that key stakeholders are informed of any potential issues that could affect the company's financial stability and ability to continue as a going concern.
Management is also responsible for evaluating whether there are conditions or events that raise substantial doubt about Burros & Fries Franchise, Inc.'s ability to continue as a going concern within one year after the date the financial statements are available to be issued. This evaluation by management, along with the auditor's assessment, provides a comprehensive review of the company's financial health and its prospects for the future.