What ethical requirements must the auditors meet in relation to their audit of Fitstop USA, INC.?

According to Fitstop's 2024 Franchise Disclosure Document, the auditors, Muhammad Zubairy, CPA PC, are required to be independent of Fitstop USA, INC. and to meet other ethical responsibilities in accordance with the relevant ethical requirements relating to their audits. This ensures that the audit is conducted without bias or conflicts of interest, providing a fair and objective assessment of Fitstop's financial statements. The auditors must adhere to auditing standards generally accepted in the United States of America (GAAS). These standards dictate the procedures and practices the auditors must follow to ensure the reliability and accuracy of the financial statements.

The auditors' responsibilities include obtaining reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and issuing an auditor's report that includes their opinion. They must exercise professional judgment and maintain professional skepticism throughout the audit, which means critically assessing the information provided and not assuming that management is always honest. The auditors must 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. This involves examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

Furthermore, the auditors must obtain an understanding of internal control relevant to the audit to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Fitstop USA, INC.'s internal control. They 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. The auditors also conclude whether, in their judgment, there are conditions or events that raise substantial doubt about Fitstop USA, INC.'s ability to continue as a going concern for a reasonable period of time. Finally, they are 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.