What is the auditor's responsibility regarding Dryject's ability to continue as a going concern?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
y, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the 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, I:
- 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 DryJect Management, 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.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the auditor's responsibility includes concluding whether there are conditions or events that raise substantial doubt about DryJect Management, LLC's ability to continue as a going concern for a reasonable period of time. This assessment is a critical part of the audit process. The auditor must evaluate various factors to determine if there is a significant risk that Dryject may not be able to meet its financial obligations in the foreseeable future. This evaluation is based on the aggregate impact of different conditions and events rather than any single factor in isolation.
To fulfill this responsibility, the auditor must exercise professional judgment and maintain professional skepticism throughout the audit. They need to identify and assess the risks of material misstatement in the financial statements, whether due to fraud or error, and design audit procedures to address those risks. This involves examining evidence related to the amounts and disclosures in the financial statements on a test basis. The auditor also needs to understand Dryject's internal controls to design appropriate audit procedures, although they do not express an opinion on the effectiveness of these controls.
Furthermore, the auditor evaluates the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by Dryject's management. The auditor is also 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. This communication ensures that key stakeholders are informed about the financial health and stability of Dryject. This process helps to provide reasonable assurance that the financial statements are free from material misstatement and fairly present Dryject's financial position.