What is the auditor required to evaluate regarding 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, the auditor is required to evaluate the appropriateness of the accounting policies used by the company. This evaluation is part of a broader audit conducted in accordance with auditing standards generally accepted in the United States of America (US GAAS). The auditor must exercise professional judgment and maintain professional skepticism throughout the audit.
In addition to evaluating accounting policies, the auditor must identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. They design and perform audit procedures responsive to those risks, including examining evidence regarding the amounts and disclosures in the financial statements on a test basis. The auditor also obtains an understanding of internal control relevant to the audit in order to design appropriate audit procedures, though they do not express an opinion on the effectiveness of the company's internal control.
The auditor also evaluates the reasonableness of significant accounting estimates made by management, as well as the overall presentation of the financial statements. Furthermore, the auditor must conclude whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. These responsibilities ensure that the financial statements are presented fairly and in accordance with accounting principles generally accepted in the United States of America.
For a prospective Checkers franchisee, this means that the financial statements presented in the FDD have been thoroughly examined by an independent auditor. This provides a level of assurance that the financial information is reliable and fairly represents the company's financial position and performance. Franchisees can rely on these audited statements to make informed decisions about investing in a Checkers franchise.