What internal controls are Bumper Man's management responsible for maintaining to ensure accurate financial statements?

According to Bumper Man's 2025 Franchise Disclosure Document, management is responsible for designing, implementing, and maintaining internal controls relevant to the preparation and fair presentation of financial statements. These controls are designed to ensure the financial statements are free from material misstatement, whether due to fraud or error. This responsibility is explicitly stated in the Independent Auditor's Report included in the FDD.

In practice, this means Bumper Man's management must establish and oversee procedures and policies that ensure the accuracy and reliability of the company's financial data. These controls might include things like segregation of duties (making sure no single person has too much control over a financial transaction), regular account reconciliations, and robust IT security to protect financial systems. They also have to make sure that the company's accounting practices align with U.S. generally accepted accounting principles (GAAP).

The auditor, Kyle E. Patton, CPA, assesses these internal controls as part of the audit process but does not express an opinion on their effectiveness. The auditor's role is to gain reasonable assurance that the financial statements are fairly presented, and the assessment of internal controls helps inform the audit procedures. Ultimately, it is Bumper Man's management that bears the responsibility for creating and maintaining a sound system of internal control over financial reporting.

For a prospective franchisee, this indicates that Bumper Man takes financial reporting seriously and has an independent auditor review its financials. While the FDD doesn't detail the specific internal controls in place, the statement highlights the importance of these controls in ensuring the accuracy of the financial information provided to potential investors and franchisees. A prospective franchisee might want to inquire further about the specific types of internal controls Bumper Man has implemented to ensure financial statement accuracy.