During a Degree Wellness audit, what must the auditor evaluate regarding accounting policies?

According to Degree Wellness's 2025 Franchise Disclosure Document, during an audit of the company's financial statements, the auditor must evaluate the appropriateness of the accounting policies used. The auditor also assesses the reasonableness of significant accounting estimates made by the management team. Finally, the auditor evaluates the overall presentation of the financial statements.

This evaluation is part of a broader set of responsibilities that the auditor undertakes to form an opinion on whether the financial statements are presented fairly and are free from material misstatement. These responsibilities are guided by generally accepted auditing standards (GAAS).

For a prospective Degree Wellness franchisee, this indicates that the franchisor's financial statements are subject to external scrutiny, which can provide a level of assurance regarding the accuracy and reliability of the financial information presented. Franchisees may want to review these audited statements and related notes to understand the franchisor's financial health and accounting practices.