What ethical responsibilities are the auditors of Precision Door Service required to meet?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Auditor's Responsibilities for the Audit of the 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.
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to the 2025 FDD, the auditors of Neighborly Company, which includes Precision Door Service, must adhere to specific ethical responsibilities as part of their audit. The auditors are required to be independent of the company and fulfill other ethical duties in line with the relevant ethical requirements pertaining to their audits. This independence ensures that the auditors can provide an unbiased opinion on the financial statements.
The auditors' primary objective is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. They issue an auditor's report that includes their professional opinion on the fairness and accuracy of the financial statements. This assurance, while high, is not absolute, meaning there's a risk that some misstatements may not be detected, especially those resulting from fraud involving collusion or intentional misrepresentation.
To meet these responsibilities, the auditors exercise professional judgment and maintain skepticism throughout the audit. They identify and assess the risks of material misstatement, design audit procedures responsive to those risks, and examine evidence on a test basis. They also obtain an understanding of the company's internal controls but do not express an opinion on their effectiveness. Furthermore, the auditors evaluate the appropriateness of accounting policies, the reasonableness of significant accounting estimates, and the overall presentation of the financial statements. Finally, they conclude whether there are conditions that raise substantial doubt about the company's ability to continue as a going concern.