What aspects of Chocolate Bash's accounting does the auditor evaluate?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
e Management of CHOCOLATE BASH FRANCHISING LLC
Opinion
We have audited the financial statements of CHOCOLATE BASH FRANCHISING LLC (the "Company"), which comprise the Balance Sheet as of December 31, 2023 & December 31, 2022 & December 31, 2021, the related Profit & Loss Statements, the related Statements of Cashflows, the related Statements of Shareholders' Equity, and the related notes for the twelve-month periods then ended. (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 & December 31, 2022 & December 31, 2021, and the results of its operations and its cash flows for the twelve-month periods then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the 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 Financial Statements
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, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether 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 one year after the date that the financial statements are available to be issued.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the auditor evaluates several aspects of the company's accounting practices. The auditor's report includes an opinion on the fairness of Chocolate Bash's financial statements, which comprise the Balance Sheet as of December 31, 2023, December 31, 2022, and December 31, 2021, the related Profit & Loss Statements, Statements of Cashflows, Statements of Shareholders' Equity, and related notes for the twelve-month periods then ended. The auditor assesses whether these financial statements present fairly the financial position, results of operations, and cash flows in accordance with accounting principles generally accepted in the United States of America.
The auditor's responsibilities include identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, and designing and performing audit procedures responsive to those risks. These procedures involve 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 to design appropriate audit procedures, though they do not express an opinion on the effectiveness of Chocolate Bash's internal control.
Furthermore, the auditor evaluates the appropriateness of accounting policies used by Chocolate Bash and the reasonableness of significant accounting estimates made by management. They also consider whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. The auditor communicates with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control related matters identified during the audit.