What ethical responsibilities are the auditors of The C12 Group required to meet?

According to the 2025 C12 Group Franchise Disclosure Document, the auditors are required to be independent of The C12 Group, LLC and to meet other ethical responsibilities in accordance with the relevant ethical requirements relating to the audits. This requirement ensures that the auditors maintain objectivity and integrity while conducting their audit. Independence prevents conflicts of interest that could compromise the reliability of the financial statements.

In addition to independence, the auditors' responsibilities include exercising professional judgment and maintaining professional skepticism throughout the audit. They must identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. This involves examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

The auditors are also required to obtain an understanding of internal control relevant to the audit to design appropriate audit procedures. However, they are not required to express an opinion on the effectiveness of The C12 Group's internal control. Furthermore, the auditors must evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Finally, the auditors must conclude whether there are conditions or events that raise substantial doubt about The C12 Group's ability to continue as a going concern for a reasonable period of time and communicate the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that were identified during the audit with those charged with governance.