Does the auditor express an opinion on the effectiveness of The C12 Group, LLC's internal control?

According to the 2025 C12 Group Franchise Disclosure Document, the auditor does not express an opinion on the effectiveness of The C12 Group, LLC's internal control. While the auditor obtains an understanding of internal control relevant to the audit to design appropriate audit procedures, this is specifically not for the purpose of expressing an opinion on the effectiveness of C12 Group's internal control.

This means that the audit focuses on whether the financial statements are free from material misstatement, rather than evaluating the strength and reliability of the company's internal controls. The auditor's responsibilities include identifying and assessing the risks of material misstatement, examining evidence regarding amounts and disclosures in the financial statements, and evaluating the appropriateness of accounting policies and estimates.

For a prospective franchisee, this implies that the financial statements have been reviewed for accuracy and adherence to accounting standards, but there is no independent assessment of the internal controls that C12 Group has in place to ensure financial accuracy and compliance. A potential franchisee may want to independently assess the internal controls or seek additional assurances regarding the company's financial practices.

It is common for franchise audits to focus on the fairness of financial statement presentation rather than the effectiveness of internal controls. Franchisees should be aware of this distinction and consider what additional due diligence they may want to perform.