What is the auditor's responsibility in evaluating the reasonableness of significant accounting estimates made by Gold Star's management?

According to Gold Star's 2025 Franchise Disclosure Document, the auditor's responsibility includes evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by the management of Gold Star. This evaluation is part of a broader audit performed in accordance with generally accepted auditing standards. The auditor exercises professional judgment and maintains professional skepticism throughout the audit to identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.

To address these risks, the auditor designs and performs audit procedures that include examining evidence regarding the amounts and disclosures in the consolidated financial statements on a test basis. The auditor also obtains an understanding of internal control relevant to the audit, although not for the purpose of expressing an opinion on the effectiveness of Gold Star's internal control. The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement, providing an opinion in their report.

Furthermore, the auditor must conclude whether there are conditions or events that raise substantial doubt about Gold Star's ability to continue as a going concern. The auditor is also required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. This comprehensive approach ensures that the financial statements are presented fairly and in accordance with accounting principles generally accepted in the United States of America.