What is the auditor's responsibility in exercising professional judgment and maintaining professional skepticism throughout the audits of Floyds 99?

According to the 2025 FDD, the auditor's responsibilities for the audits of Floyds 99's financial statements include exercising professional judgment and maintaining professional skepticism throughout the audits. This means the auditor must use their expertise and experience to make informed decisions during the audit process and maintain a questioning mind, critically assessing the validity of evidence and representations made by management.

The auditor is also responsible for identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error. They must design and perform audit procedures responsive to those risks, including examining evidence regarding the amounts and disclosures in the financial statements on a test basis. Additionally, the auditor needs to obtain an understanding of internal control relevant to the audits in order to design appropriate audit procedures, though not for the purpose of expressing an opinion on the effectiveness of the company's internal control.

Furthermore, the auditor must 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. They must also conclude whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. The auditor is required to communicate with those charged with governance regarding the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters identified during the audits.