What is the auditor's responsibility regarding internal control when auditing Aw?

According to Aw'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 performed for the purpose of expressing an opinion on the effectiveness of Aw's internal control, and therefore, no such opinion is expressed. This means the auditor assesses internal controls only to the extent necessary to plan the audit, not to provide assurance on the quality of those controls.

In practical terms, this means that while the auditor will review Aw's internal control procedures to understand the risk of potential misstatements in the financial statements, they will not issue a separate report or opinion on whether those controls are adequate or effective. The auditor's focus is on the financial statements themselves, and their understanding of internal control is a means to that end.

For a prospective Aw franchisee, this highlights the importance of conducting their own due diligence on Aw's financial health and internal controls. While the audited financial statements provide some assurance, the absence of an opinion on internal controls means that franchisees should not rely solely on the audit to assess the strength of Aw's operational and financial management practices. It would be prudent for a potential franchisee to ask Aw about their internal control policies and procedures and possibly seek independent advice on this matter.