During the audit, is the appropriateness of accounting policies used by Endless Summer Sweets evaluated?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
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 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 Endless Summer Sweets Franchising 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.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Endless Summer Sweets Franchising Inc.'s ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Endless Summer Sweets's 2024 Franchise Disclosure Document, the appropriateness of accounting policies is evaluated during the audit. As part of the audit, the auditor exercises professional judgment and maintains professional skepticism, identifies and assesses risks of material misstatement, and obtains an understanding of internal control. These procedures are designed to ensure the financial statements are fairly presented.
Specifically, the auditor evaluates the appropriateness of the accounting policies used by Endless Summer Sweets's management and assesses the reasonableness of significant accounting estimates. They also evaluate the overall presentation of the financial statements to ensure compliance with generally accepted auditing standards. This evaluation helps to provide assurance that the financial information is reliable and accurately reflects the company's financial position.
Furthermore, the auditor concludes whether there are conditions or events that raise substantial doubt about Endless Summer Sweets's ability to continue as a going concern. The auditor also communicates with those charged with governance regarding the scope and timing of the audit, significant audit findings, and internal control-related matters identified during the audit. This comprehensive approach aims to provide a thorough and reliable assessment of Endless Summer Sweets's financial statements.