What auditing standards were the audits of Monicals Pizza conducted in accordance with?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
n 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.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the audits of the consolidated financial statements were conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). This indicates that the independent auditor, Baker Tilly US, LLP, followed a standardized set of guidelines and principles to ensure the reliability and accuracy of the financial statements. These standards dictate the responsibilities of the auditor, including exercising professional judgment and maintaining professional skepticism throughout the audit process.
The auditor's responsibilities under GAAS include identifying and assessing the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. To address these risks, the auditor designs and performs audit procedures, such as examining evidence regarding the amounts and disclosures in the financial statements on a test basis. The auditor also obtains an understanding of internal control relevant to the audit to design appropriate procedures, though they do not express an opinion on the effectiveness of the company's internal control.
Furthermore, the auditor evaluates the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as the overall presentation of the consolidated financial statements. They also conclude whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. The auditor is required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit.
For a prospective Monicals Pizza franchisee, this means that the financial statements included in the FDD have been reviewed by an independent auditor following established and recognized standards. This provides a level of assurance regarding the financial information presented, although it's important to remember that an audit is not a guarantee of absolute accuracy. Franchisees should still carefully review the financial statements and consider seeking advice from their own financial advisors.