What provides the basis for the audit opinion on Fly To Fit's financial statements?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company 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 To Fit's 2024 Franchise Disclosure Document, the basis for the audit opinion on the company's financial statements is that the audit was conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). The auditor's responsibilities under those standards are described in the report. The auditor is required to be independent of Fly To Fit and to meet ethical responsibilities relating to the audits.
The auditor believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the audit opinion. The audit's objective is to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion. Reasonable assurance is a high level of assurance but isn't absolute, so there is no guarantee that an audit conducted according to GAAS will always detect a material misstatement.
In performing the audit, 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, including examining evidence regarding the amounts and disclosures in the financial statements on a test basis. The auditor also obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
Furthermore, the auditor evaluates the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluates the overall presentation of the financial statements. The auditor concludes whether, in their judgment, there are conditions or events that raise substantial doubt about Fly To Fit's ability to continue as a going concern for a reasonable period of time.