What ethical responsibilities are the auditors required to meet during the Counselor Realty audit?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
AP).
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' 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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, the auditors performing the audit of Counselor Realty's financial statements are required to be independent of the company. They must also meet other ethical responsibilities in accordance with the relevant ethical requirements relating to their audits. These requirements are based on auditing standards generally accepted in the United States of America (GAAS).
The auditors' responsibilities include exercising professional judgment and maintaining professional skepticism throughout the audit. They must 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 are required to obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. However, this does not include expressing an opinion on the effectiveness of Counselor Realty's internal control. The auditors also 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. Finally, the auditors must 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.