For Christian Brothers Automotive, what auditing standards were applied to the supplementary information?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with 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 Christian Brothers Automotive Corporation'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 Christian Brothers Automotive Corporation's ability to continue as a going concern for a reasonable period of time.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the excerpts provided do not specify the auditing standards applied to the supplementary information for Christian Brothers Automotive. The document focuses primarily on the auditing standards applied to the consolidated financial statements, which are conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). These standards dictate the auditors' responsibilities in assessing financial statement accuracy and potential risks of misstatement.
While the independent auditor's report outlines the responsibilities of both management and the auditors in relation to the consolidated financial statements, it does not extend this level of detail to any supplementary information that Christian Brothers Automotive might provide. The report emphasizes the auditor's objective to obtain reasonable assurance that the financial statements are free from material misstatement and their responsibility to evaluate accounting policies and estimates.
For a prospective franchisee, this means that the FDD provides a clear picture of the standards used to audit the core financial statements. However, it remains unclear what level of scrutiny is applied to additional data or reports provided by Christian Brothers Automotive beyond these statements. A potential franchisee should directly ask Christian Brothers Automotive about the nature and extent of any supplementary information provided and what auditing standards, if any, are applied to it. This will help in making a more informed investment decision.