What does the auditor evaluate regarding the appropriateness of accounting policies used by Gokhale Method?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
In performing an audit in accordance with generally accepted auditing standards, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- 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 audit 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 Gokhale Method Institute, Inc.'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 Gokhale Method Institute, Inc.'s ability to continue as a going concern for a reasonable period of time.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the auditor evaluates the appropriateness of the accounting policies used by the company. This evaluation is part of a broader audit performed in accordance with generally accepted auditing standards. The auditor also assesses the reasonableness of significant accounting estimates made by management and evaluates the overall presentation of the financial statements.
This process ensures that the financial statements of Gokhale Method are presented fairly and in accordance with accounting principles generally accepted in the United States of America. By evaluating the appropriateness of accounting policies, the auditor helps to provide assurance that the financial information is reliable and relevant for decision-making.
For a prospective Gokhale Method franchisee, this means that the financial statements included in the FDD have been reviewed by an independent auditor who has assessed whether the accounting policies used are suitable and consistently applied. This provides a level of confidence in the financial information presented, which can be crucial for making informed investment decisions. The audit aims to detect material misstatements, whether due to fraud or error, and to ensure that the financial statements provide a fair representation of Gokhale Method's financial position and performance.