What is management responsible for designing, implementing, and maintaining regarding internal control for C12 Group's financial statements?

According to C12 Group's 2025 Franchise Disclosure Document, management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of the company's financial statements. These internal controls are intended to ensure that the financial statements are free from material misstatement, whether due to fraud or error. This responsibility aligns with standard accounting practices, requiring management to establish and uphold a system of checks and balances to safeguard the integrity of financial reporting.

In practical terms, this means C12 Group's management must create and maintain procedures to accurately record transactions, prevent fraud, and ensure compliance with accounting principles. These controls might include things like segregation of duties, regular reconciliations, and internal audits. The goal is to provide reasonable assurance that the financial statements are reliable and can be trusted by stakeholders, such as potential franchisees, investors, and lenders.

Prospective franchisees should understand that the reliability of the financial statements is, in part, dependent on the effectiveness of these internal controls. While an independent auditor also assesses the financial statements, their role is to provide an opinion on whether the statements are fairly presented, not to guarantee the effectiveness of the internal controls. Therefore, it is important for potential franchisees to review the audited financial statements carefully and consider any disclosures related to internal control weaknesses or material misstatements.