Are the financial statements for Fitstop prepared according to GAAP?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
atements of Operations and Members' Equity | Page 4 | | Statement of Cash Flows | Page 5 | | Footnotes | Page 6 |
MUHAMMAD ZUBAIRY, CPA PC
Certified Public Accountant 646.327.7013
INDEPENDENT AUDITOR'S REPORT
To the members Fitstop USA, INC.
Opinion
We have audited the financial statements of Fitstop USA, INC. which comprise the balance sheet as of December 31, 2023 and 2022, and the related statement of operations and changes in members' equity, and cash flow for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of Fitstop USA, INC. as at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our auditsin accordance with auditing standards generally accepted in the United StatesofAmerica (GAAS). Ourresponsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. Weare required to be independent of Fitstop USA, INC. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirementsrelating to our audits. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal controlrelevant to the preparationand fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the financial statements of Fitstop USA, INC. are prepared in accordance with accounting principles generally accepted in the United States of America. This is confirmed by the Independent Auditor's Report, which states that the financial statements present fairly the financial position, results of operations, and cash flows of Fitstop USA, INC. as of December 31, 2023 and 2022. The audit was conducted following auditing standards generally accepted in the United States of America (GAAS).
Management is responsible for preparing and fairly presenting the financial statements according to accounting principles generally accepted in the United States of America. This includes designing, implementing, and maintaining internal controls relevant to preparing financial statements that are free from material misstatement, whether due to fraud or error. Management must also evaluate whether there are conditions or events that raise substantial doubt about Fitstop's ability to continue as a going concern within one year after the financial statements are issued.
The auditor's responsibility is to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion. The auditor exercises professional judgment, maintains professional skepticism, assesses the risks of material misstatement, and evaluates the appropriateness of accounting policies and the reasonableness of significant accounting estimates. They also obtain an understanding of internal control relevant to the audit but do not express an opinion on the effectiveness of Fitstop's internal control.
The financial statements are prepared using the accrual basis of accounting, where revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to the receipt or disbursement of funds. Fitstop also uses estimates and assumptions that affect the reported amounts of assets and liabilities, with actual results potentially varying from those estimates. The company records revenue in accordance with the Financial Accounting Standards Board (FASB) and Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606).