What should be evaluated regarding the overall presentation of C12 Group's financial statements?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- 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. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit 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 C12 Group, LLC's internal control. Accordingly, no such opinion is expressed.
- 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.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about The C12 Group LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the auditor is responsible for evaluating the overall presentation of the financial statements. This evaluation is part of a broader audit conducted in accordance with generally accepted auditing standards. The auditor's objective is to ensure the financial statements are free from material misstatement, whether due to fraud or error.
Specifically, the auditor must evaluate the appropriateness of the accounting policies used by C12 Group and the reasonableness of significant accounting estimates made by the company's management. This involves exercising professional judgment and maintaining professional skepticism throughout the audit process. The auditor examines evidence regarding the amounts and disclosures in the financial statements on a test basis.
Furthermore, the auditor must determine if there are conditions or events that raise substantial doubt about C12 Group's ability to continue as a going concern. This assessment is critical for prospective franchisees as it provides an independent opinion on the financial health and stability of the franchisor. The auditor's report, which includes their opinion, offers assurance (though not absolute) that the financial statements present fairly the financial position, results of operations, and cash flows of C12 Group.