Does the audit of Bb.Q Chicken express an opinion on the effectiveness of the company's internal control?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, the independent auditor does not express an opinion on the effectiveness of the company's internal control. While the auditor considers internal controls when assessing the risk of material misstatement in the financial statements, this consideration is solely for the purpose of designing appropriate audit procedures.
Specifically, the auditor's report states that the audit is conducted to obtain reasonable assurance about whether the financial statements are free from material misstatement. As part of this process, the auditor assesses the risks of material misstatement, considering internal control relevant to the company's preparation and fair presentation of the financial statements. However, the report explicitly states that this consideration of internal control is not for the purpose of expressing an opinion on its effectiveness.
Therefore, prospective Bb.Q Chicken franchisees should understand that the audit provides an opinion on the fairness of the financial statements, but it does not offer any assurance regarding the strength or effectiveness of the company's internal controls. This is a common practice in financial audits, where the focus is on the accuracy of the financial statements rather than the effectiveness of internal control systems.