What aspects of accounting policies and estimates are evaluated during the audit of Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with US GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- 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.
- 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 the Company'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 the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to the 2025 FDD, the auditor's responsibilities include evaluating the appropriateness of the accounting policies used by Moes Southwest Grill and the reasonableness of significant accounting estimates made by the management team. The auditor also assesses the overall presentation of the consolidated financial statements.
Specifically, the audit aims to provide reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. Auditors exercise professional judgment and maintain skepticism throughout the audit, identifying and assessing risks of material misstatement and designing audit procedures responsive to those risks. These procedures involve examining evidence regarding the amounts and disclosures in the consolidated financial statements on a test basis.
Furthermore, the auditor obtains an understanding of internal control relevant to the audit to design appropriate audit procedures, though they do not express an opinion on the effectiveness of the company's internal control. Finally, the auditor concludes whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern for a reasonable period of time.