What does the auditor evaluate regarding the accounting policies used by Crave Cookies?
Crave_Cookies 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 Crave Cookies Franchising, LLC'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 Crave Cookies Franchising, LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the auditor evaluates the appropriateness of the accounting policies used by the company. This evaluation is part of a broader audit aimed at providing reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. The auditor's objective is to issue a report that includes their opinion on the financial statements.
In assessing the appropriateness of accounting policies, the auditor considers whether Crave Cookies has selected and applied accounting methods that are suitable for its business and industry. This includes reviewing how the company recognizes revenue, expenses, assets, and liabilities. The auditor also assesses the reasonableness of significant accounting estimates made by management, as these estimates can have a material impact on the financial statements.
The auditor's evaluation extends to the overall presentation of the financial statements, ensuring they are clear, understandable, and compliant with generally accepted accounting principles (GAAP). By evaluating these aspects, the auditor provides an independent assessment of the fairness and reliability of Crave Cookies' financial reporting, which is crucial for prospective franchisees in making informed investment decisions.