What is the auditor's responsibility regarding accounting policies used by iTan?
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 concerning the accounting policies used by iTan. The auditor's role includes evaluating whether the accounting policies used are appropriate and assessing the reasonableness of significant accounting estimates made by the management team. Additionally, the auditor evaluates the overall presentation of the financial statements to ensure they are fairly presented.
This evaluation is part of a broader audit process conducted in accordance with generally accepted auditing standards. The auditor's objective is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. However, it's important to note that reasonable assurance is not absolute, and there's no guarantee that all material misstatements will be detected.
For a prospective iTan franchisee, this means that an independent auditor has reviewed iTan's financial statements and accounting practices. This review provides a level of confidence in the accuracy and reliability of the financial information presented. Franchisees can use this information to make informed decisions about investing in an iTan franchise, understanding that the financial statements have been vetted by an independent third party.