What is the auditor's responsibility regarding internal control when auditing 1 800 Packouts?

According to 1 800 Packouts's 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal control is to obtain an understanding of internal control relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances. However, the audit is not for the purpose of expressing an opinion on the effectiveness of 1 800 Packouts's internal control, and therefore, no such opinion is expressed. The auditor's objective is to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion.

It is management's responsibility to design, implement, and maintain internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. The auditor's responsibility is to assess the risk of material misstatement of the financial statements, whether due to fraud or error, and to design and perform audit procedures responsive to those risks. These procedures include examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

The auditor must exercise professional judgment and maintain professional skepticism throughout the audit. They must also 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 financial statements. Additionally, the auditor must conclude whether there are conditions or events that raise substantial doubt about 1 800 Packouts's ability to continue as a going concern for a reasonable period of time.

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. Reasonable assurance is a high level of assurance, but it is not absolute, and there is always a risk that a material misstatement may not be detected, especially one resulting from fraud, which may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.