What must auditors evaluate regarding accounting policies used by Chatime's management?

According to Chatime's 2025 Franchise Disclosure Document, the auditors must evaluate the appropriateness of the accounting policies used by Chatime's management. They must also assess the reasonableness of significant accounting estimates made by management. Additionally, the auditors evaluate the overall presentation of Chatime's financial statements.

This evaluation is a standard part of an audit, ensuring that Chatime's financial statements are presented fairly and in accordance with generally accepted accounting principles. This process provides assurance to potential franchisees and investors that the financial information is reliable and transparent.

The auditor's responsibilities also include exercising professional judgment and maintaining professional skepticism throughout the audit. They 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.