Does All County management's responsibility for financial statements include the design, implementation, and maintenance of internal controls?

According to All County's 2025 Franchise Disclosure Document, management is indeed responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of the company's financial statements. This responsibility ensures that the financial statements are free from material misstatement, whether due to fraud or error. This is a standard practice, as it ensures the accuracy and reliability of financial reporting.

This responsibility means All County's management must establish and maintain an effective internal control system. This system includes policies and procedures designed to prevent or detect material misstatements in the financial statements. The management is responsible for ensuring that these controls are working as intended.

An independent auditor, Joe Teston CPA Advisors, audits All County's financial statements. The auditor's responsibility is to express an opinion on these financial statements based on their audits, conducted in accordance with auditing standards generally accepted in the United States of America. The auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances.

However, the auditor's assessment of internal controls is not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Therefore, while the auditor reviews the internal controls, they do not provide a separate opinion on whether those controls are effective. This distinction is important for franchisees to understand, as the audit provides assurance on the financial statements themselves, but not necessarily on the internal control system that produces them.