What accounting principles were used in the preparation of the Monicals Pizza consolidated financial statements, according to the audit?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
lated notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. This is a standard practice, ensuring that the financial statements are presented fairly and consistently.
The independent auditor's report states that the audit was conducted based on auditing standards generally accepted in the United States of America (GAAS). The auditor's responsibility includes evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management, ensuring that the financial statements provide a fair representation of Monicals Pizza's financial position.
Furthermore, the notes to the consolidated financial statements mention that the preparation of these statements requires management to make estimates and assumptions affecting the reported amounts of assets, liabilities, income, and expenses. This is a common aspect of financial reporting, acknowledging that some figures are based on informed judgments. Actual results could differ from those estimates. Understanding these accounting principles and the role of estimates is crucial for a prospective franchisee to assess the financial health and stability of Monicals Pizza.