What does the auditor consider when evaluating the appropriateness of accounting policies used by Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with US GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated 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 consolidated 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 the Company'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 consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, when performing an audit, the auditor evaluates the appropriateness of accounting policies used by Checkers and the reasonableness of significant accounting estimates made by management. The auditor also evaluates the overall presentation of the consolidated financial statements.
This evaluation is part of a broader audit process that includes exercising professional judgment and maintaining professional skepticism, identifying and assessing risks of material misstatement due to fraud or error, and obtaining an understanding of internal controls. However, the audit is not for the purpose of expressing an opinion on the effectiveness of Checkers' internal control.
The auditor's responsibilities also include concluding whether there are conditions or events that raise substantial doubt about Checkers' ability to continue as a going concern. Furthermore, the auditor is required to communicate with those charged with governance regarding the audit's scope, timing, significant findings, and certain internal control-related matters identified during the audit.