What are some examples of significant accounting estimates made by Deck Medic's management that are evaluated?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
if there is a substantial likelihood that, individually or in aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, 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\nerror, 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 to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Deck Medic, Inc.'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.
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, the independent auditor evaluates the reasonableness of significant accounting estimates made by Deck Medic's management. The auditor's responsibilities include exercising professional judgment and maintaining professional skepticism throughout the audit. They 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.
Additionally, the auditor obtains an understanding of internal control relevant to the audit to design audit procedures that are appropriate in the circumstances. However, this process is not for the purpose of expressing an opinion on the effectiveness of Deck Medic's internal control, and no such opinion is expressed. The auditor evaluates the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Finally, the auditor concludes whether, in their judgment, there are conditions or events considered in the aggregate that raise substantial doubt about Deck Medic's ability to continue as a going concern for a reasonable period. This evaluation is a critical part of ensuring the accuracy and reliability of Deck Medic's financial statements, providing stakeholders with confidence in the company's financial reporting.