Is there a disclaimer included in Bhc's financial statements?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
Source: Item 21 — Financial Statements (FDD page 52)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Independent Auditor's Report includes a disclaimer. The disclaimer states that the audit was conducted in accordance with generally accepted auditing standards in the United States. While these standards provide a high level of assurance, they do not guarantee that all material misstatements will be detected. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error because fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Management is responsible for preparing financial statements that adhere to accounting principles generally accepted in the United States of America, including internal controls relevant to the preparation and fair presentation of the financial statements. Management is also required to evaluate whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern within one year after the financial statements are available.
This disclaimer is standard practice in audited financial statements. It informs the reader that the audit provides a reasonable level of assurance, but it is not a guarantee against all misstatements. Prospective Bhc franchisees should understand the limitations of an audit when reviewing the company's financial statements.