What does the auditor consider when evaluating the overall presentation of Engel & Volkers' consolidated financial statements?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 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 consolidated 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 consolidated 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 Engel & Völkers Americas, Inc. and Subsidiary'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 consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Engel & Völkers Americas, Inc. and Subsidiary's ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, when performing an audit, the auditor evaluates the overall presentation of the consolidated financial statements. The auditor also assesses the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management. This evaluation is part of a broader audit process conducted in accordance with generally accepted auditing standards.
This means that the auditor is not only concerned with the accuracy of the numbers presented in Engel & Volkers' financial statements but also with how those numbers are organized and presented. They want to ensure that the statements are clear, understandable, and not misleading to someone reading them. This includes checking that the financial statements are structured in a way that makes it easy to see the financial position of Engel & Volkers.
For a prospective franchisee, this indicates that Engel & Volkers' financial statements have been subjected to scrutiny regarding their clarity and overall presentation, in addition to their accuracy. This provides a degree of confidence that the financial information is presented in a way that facilitates informed decision-making. Franchisees can review these audited statements, found in Exhibit I, to gain insight into the financial health and reporting practices of Engel & Volkers.