What ethical requirements are the auditors of Burros Fries required to meet in relation to their audits?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
We conducted our audit in accordance auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Burros & Fries Franchise, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. 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 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the auditors are required to adhere to specific ethical standards to ensure the integrity and reliability of the financial statements. The auditors must be independent of Burros Fries and fulfill other ethical responsibilities in accordance with the relevant ethical requirements pertaining to their audits. This independence is crucial for maintaining objectivity and impartiality throughout the audit process.
To meet their objectives, the auditors must obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and issue an auditor's report that includes their opinion. This involves exercising professional judgment, maintaining professional skepticism, identifying and assessing risks of material misstatement, and designing audit procedures responsive to those risks. The auditors examine evidence regarding the amounts and disclosures in the financial statements on a test basis.
Furthermore, the auditors must gain an understanding of internal control relevant to the audit to design appropriate audit procedures, though they do not express an opinion on the effectiveness of Burros Fries's internal control. They evaluate the appropriateness of accounting policies used, the reasonableness of significant accounting estimates made by management, and the overall presentation of the financial statements. The auditors also conclude whether there are conditions or events that raise substantial doubt about Burros Fries's ability to continue as a going concern.
Finally, the auditors are 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. These measures collectively ensure that the audit is conducted ethically and professionally, providing stakeholders with reliable financial information about Burros Fries.