What should be evaluated regarding accounting policies used by Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
In performing an audit in accordance with generally accepted auditing standards, we:
- x Exercise professional judgment and maintain professional skepticism throughout the audit.
- x Identify and assess the risks of material misstatement of the consolidated 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 consolidated financial statements.
- x 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 Golden Krust Franchising, Inc.'s internal control. Accordingly, no such opinion is expressed.
- x 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 consolidated financial statements.
- x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Golden Krust Franchising, Inc.'s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, when auditing the company's financial statements, several aspects of their accounting policies should be evaluated. These include assessing the appropriateness of the accounting policies used by Golden Krust Caribbean Restaurant and evaluating the reasonableness of significant accounting estimates made by the management. Additionally, the overall presentation of the consolidated financial statements should be evaluated.
Specifically, the audit aims to identify and assess risks of material misstatement in the financial statements, whether due to fraud or error. Auditors examine evidence regarding the amounts and disclosures in the consolidated financial statements on a test basis. They also obtain an understanding of internal control relevant to the audit to design appropriate audit procedures, though without expressing an opinion on the effectiveness of Golden Krust Caribbean Restaurant's internal control.
Furthermore, the audit seeks to determine if there are conditions or events that raise substantial doubt about Golden Krust Caribbean Restaurant's ability to continue as a going concern. The auditors must exercise professional judgment and maintain professional skepticism throughout the audit. Communication with those charged with governance is required regarding the audit's scope, timing, significant findings, and internal control-related matters identified during the audit.