What accounting standards are used in the audit of Carls' financial statements?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
bilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Combined Consolidated Financial Statements section of our report. We are required to be independent of the Company 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.
Responsibilities of Management for the Combined Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the combined consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the combined consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. This means that Carls adheres to a standardized framework of accounting rules, standards, and procedures issued by the Financial Accounting Standards Board (FASB). These principles ensure that the financial statements are presented fairly and consistently, allowing for meaningful comparisons across different reporting periods and with other companies.
The independent auditors, KPMG LLP, conducted their audits in accordance with auditing standards generally accepted in the United States of America (GAAS). GAAS provides a framework for how audits should be performed to ensure they are reliable and credible. These standards dictate the responsibilities of the auditors, including maintaining independence, exercising professional judgment and skepticism, and obtaining sufficient evidence to support their opinion.
For a prospective Carls franchisee, this indicates that the financial statements have been rigorously examined by an independent accounting firm using well-established and respected standards. This can provide a level of confidence in the financial information presented. Furthermore, the adoption of new accounting guidance, such as the Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases in fiscal year 2023, demonstrates Carls's commitment to staying current with accounting regulations, which is a positive sign for potential investors.