What does the auditor for Churchs Chicken exercise throughout the audit?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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 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 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 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 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 35–43)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the auditor, when conducting an audit in accordance with Generally Accepted Auditing Standards (GAAS), exercises professional judgment and maintains professional skepticism throughout the audit. This means the auditor approaches the audit with a questioning mind and critically assesses the evidence presented.
In addition to exercising professional judgement and skepticism, the auditor identifies and assesses 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 not for the purpose of expressing an opinion on the effectiveness of the company's internal control.
The auditor evaluates the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, and evaluates the overall presentation of the financial statements. Finally, the auditor concludes whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern for a reasonable period of time. These procedures are aligned with standard auditing practices to ensure the accuracy and reliability of financial statements.