What is the auditor's responsibility in evaluating the overall presentation of iTan's financial statements?
Itan Franchise · 2025 FDDAnswer from 2025 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 iTan Franchising, 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 financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate that raise substantial doubt about iTan Franchising, Inc.'s ability to continue as a going concern for a reasonable period of time.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the auditor has specific responsibilities when evaluating the overall presentation of the company's financial statements. As part of the audit, the auditor must evaluate the appropriateness of the accounting policies Itan uses, as well as the reasonableness of significant accounting estimates that Itan's management makes. The auditor also evaluates the overall presentation of the financial statements themselves.
In addition to evaluating the presentation of the financial statements, the auditor's responsibilities include exercising professional judgment and maintaining professional skepticism throughout the audit. They must 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. These procedures include examining evidence regarding the amounts and disclosures in the financial statements on a test basis.
The auditor must also obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate for the circumstances. However, the auditor does not express an opinion on the effectiveness of Itan Franchising, Inc.'s internal control. Finally, the auditor must conclude whether there are conditions or events that raise substantial doubt about Itan's ability to continue as a going concern for a reasonable period of time.