Is the auditing firm required to be independent of Fly Fitness Franchise LLC?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of Financial Statements section of our report. We are required to be independent of Fly Fitness Franchise LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 44)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the auditing firm is required to be independent. The Independent Auditor's Report states that the audit was conducted in accordance with generally accepted auditing standards in the United States of America. As part of these standards, the auditor is required to be independent of Fly Fitness and to meet ethical responsibilities related to the audits. The auditor's report for the financial statements as of December 31, 2023, confirms this requirement.
This independence is crucial for ensuring the credibility and reliability of the financial statements. It means that the auditing firm, R & Associates Certified Public Accountants, LLC, must not have any financial, personal, or professional relationships with Fly Fitness that could compromise their objectivity. This requirement helps to assure prospective franchisees that the financial information provided by Fly Fitness has been reviewed by an unbiased third party.
The auditor's responsibilities include obtaining reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. They exercise professional judgment and maintain professional skepticism throughout the audit, assess the risks of material misstatement, and evaluate the appropriateness of accounting policies used by Fly Fitness. The auditor also evaluates Fly Fitness's ability to continue as a going concern.
Overall, the explicit statement regarding the auditor's independence in the FDD provides a level of confidence in the accuracy and fairness of Fly Fitness's reported financial performance. Prospective franchisees can take comfort in knowing that the financial statements have been examined by an independent firm adhering to strict ethical and professional standards.