What is C12 Group management responsible for regarding internal controls related to financial statement preparation?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether 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 within one year after the date that the financial statements are available to be issued.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, management is responsible for several key aspects related to the preparation and presentation of financial statements. This includes ensuring the financial statements are prepared and presented fairly, adhering to accounting principles generally accepted in the United States of America. Management is also tasked with designing, implementing, and maintaining internal controls that are relevant to the preparation and fair presentation of financial statements, ensuring they are free from material misstatement, whether due to fraud or error.
This responsibility extends to evaluating whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about C12 Group's ability to continue as a going concern within one year after the date the financial statements are available to be issued. This evaluation is a critical component of financial reporting, as it directly impacts the transparency and reliability of the financial statements.
For a prospective franchisee, this indicates that C12 Group places a high priority on accurate and reliable financial reporting. The inclusion of these responsibilities in the FDD underscores the importance of sound financial management within the organization. Franchisees can take comfort in knowing that the franchisor's financial statements are subject to rigorous internal controls and are prepared in accordance with established accounting standards, which promotes trust and confidence in the financial health of the C12 Group.