When auditing Canine Dimensions Franchising LLC, what should be evaluated regarding accounting policies?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, I:
- Exercise professional judgment and maintain professional skepticism throughout the audit
- Identify and assess the risks of material misstatements 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 CANINE DIMENSIONS FRANCHISING LLC 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 my judgment, there are no conditions or events, considered in the aggregate, that raise substantial doubt about CANINE DIMENSIONS FRANCHISING LLC LLC ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, when performing an audit, the auditor should evaluate the appropriateness of the accounting policies used by Canine Dimensions, as well as the reasonableness of significant accounting estimates made by the company's management. The auditor also evaluates the overall presentation of the financial statements.
The auditor's objective is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to error or fraud, and to issue an auditor's report that includes their opinion. However, reasonable assurance is not absolute, and there is a risk that material misstatements may not always be detected, especially those resulting from fraud.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America. This includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Management must also evaluate Canine Dimensions's ability to continue as a going concern.