What does the auditor evaluate regarding accounting policies used by Floyds 99?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing audits in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audits.
- 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 audits 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 the Company'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 the Company's ability to continue as a going concern for a reasonable period of time.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the auditor evaluates the appropriateness of the accounting policies used by the management of Floyds 99 Franchising, LLC. This evaluation is part of a broader audit conducted in accordance with generally accepted auditing standards in the United States of America (GAAS). The auditor's objective is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report including their opinion.
In addition to assessing accounting policies, the auditor also evaluates the reasonableness of significant accounting estimates made by the management and the overall presentation of the financial statements. This includes examining evidence regarding the amounts and disclosures in the financial statements on a test basis. The auditor also gains an understanding of internal control relevant to the audit to design appropriate audit procedures, although they do not express an opinion on the effectiveness of the company's internal control.
The auditor exercises professional judgment and maintains professional skepticism throughout the audit. They 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. The auditor also considers whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern.
For a prospective Floyds 99 franchisee, this means that an independent auditor has reviewed the financial statements of the franchisor, Floyds 99 Franchising, LLC, and has assessed whether the accounting policies used are appropriate and reasonable. This provides a level of assurance that the financial information presented by the franchisor is fairly stated in accordance with accounting principles generally accepted in the United States of America.