What ethical responsibilities are the auditors required to meet when auditing Churchs Chicken?

According to Churchs Chicken's 2025 Franchise Disclosure Document, the auditors, Ernst & Young LLP, are required to adhere to specific ethical responsibilities. As stated in the 'Basis for Opinion' section of the auditor's report, the audits are conducted following auditing standards generally accepted in the United States of America (GAAS). Under these standards, the auditors must maintain independence from Cajun Global LLC, the parent company of Churchs Chicken, and fulfill other ethical duties as per the relevant ethical requirements pertaining to their audits. The auditors must obtain sufficient and appropriate audit evidence to provide a basis for their audit opinion.

In performing an audit in accordance with GAAS, the auditors must exercise professional judgment and maintain professional skepticism throughout the audit. They are required to 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. These procedures include examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

Furthermore, the auditors must obtain an understanding of internal control relevant to the audit to design appropriate audit procedures, though not for the purpose of expressing an opinion on the effectiveness of the company's internal control. They 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. The auditors also conclude whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. Finally, they are required to communicate 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.

For a prospective Churchs Chicken franchisee, this indicates that the financial statements presented in the FDD have been rigorously examined by an independent auditor who is bound by ethical and professional standards. This provides a level of assurance that the financial information is fairly presented, though it is not a guarantee against all misstatements. Franchisees can take comfort in knowing that the audit process includes assessing the risk of fraud and evaluating the company's ability to continue as a going concern, which are important factors in assessing the financial health and stability of Churchs Chicken.