What is the auditor's responsibility regarding Anago's internal controls during the audit?

According to Anago's 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal controls is to obtain an understanding of internal control relevant to the audits in order to design audit procedures that are appropriate in the circumstances. However, this understanding is not for the purpose of expressing an opinion on the effectiveness of Anago Cleaning Systems, Inc. and Subsidiaries' internal control, and the auditor does not express such an opinion. This means the auditor assesses Anago's internal controls only to the extent necessary to plan the audit, not to provide assurance on the quality of those controls.

This approach is standard in financial audits. The auditor's primary goal is to determine whether the financial statements are fairly presented, not to evaluate the internal control system itself. However, the auditor is required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that were identified during the audits.

For a prospective Anago franchisee, this means that the financial statements have been audited by an independent firm, but the audit does not provide a specific guarantee about the strength of Anago's internal controls. While the auditor will communicate any significant internal control weaknesses they identify to Anago's management, they are not required to perform a comprehensive assessment or issue an opinion on the effectiveness of those controls. Therefore, franchisees should not rely solely on the audit as an endorsement of Anago's internal control environment.