What is the auditor's responsibility regarding the design of audit procedures that are appropriate in the circumstances for Exit Realty Corp. International?

According to Exit's 2025 Franchise Disclosure Document, the auditor's responsibility includes obtaining an understanding of internal control relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances. However, the audit is not for the purpose of expressing an opinion on the effectiveness of Exit Realty Corp. International's internal control, and accordingly, no such opinion is expressed. This means the auditor focuses on the financial statements and not on providing assurance about the strength of Exit's internal controls.

The auditor's procedures involve identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, and designing and performing audit procedures responsive to those risks. These procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. The auditor also 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.

Furthermore, the auditor must conclude whether there are conditions or events that raise substantial doubt about Exit's ability to continue as a going concern for a reasonable period of time. 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 transparency and provides insights to those overseeing Exit's financial reporting process.