According to the Basis for Opinion, what does the audit of Management Recruiters include?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the audit includes several procedures to ensure the financial statements are free of material misstatement, whether due to error or fraud. These procedures involve assessing risks and responding to those risks by examining evidence regarding the amounts and disclosures in the financial statements on a test basis.
The audit also includes evaluating the accounting principles used, significant estimates made by management, and the overall presentation of the financial statements. The auditors state that they believe their audits provide a reasonable basis for their opinion.
It is important to note that the audit does not include an audit of Management Recruiters' internal control over financial reporting, and the auditors express no opinion on the effectiveness of the company's internal control over financial reporting. This means that while the auditors gain an understanding of internal control, their focus is on the financial statements themselves, not on the systems and processes that produce those statements.