What procedures are included in identifying and assessing the risks of material misstatement of the consolidated financial statements for 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 specific procedures for identifying and assessing risks of material misstatement in Moes Southwest Grill's consolidated financial statements. These procedures involve exercising professional judgment and maintaining professional skepticism throughout the audit. The auditor identifies and assesses the risks of material misstatement, whether due to fraud or error, and designs and performs audit procedures responsive to those risks. These procedures include 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 in order to design audit procedures that are appropriate for the circumstances. However, this process does not include expressing an opinion on the effectiveness of the company's internal control. The auditor also evaluates the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluates the overall presentation of the consolidated financial statements.
Finally, the auditor concludes whether there are conditions or events that raise substantial doubt about Moes Southwest Grill's ability to continue as a going concern for a reasonable period of time. These procedures are performed in accordance with US GAAS (Generally Accepted Auditing Standards) to provide reasonable assurance that the financial statements are free from material misstatement.