What is management responsible for regarding internal controls related to financial statements for C12 Group?
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 holds several key responsibilities concerning the financial statements of the company. These responsibilities are detailed within the Independent Auditor's Report included in the FDD. Specifically, management is tasked with the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America. This ensures that the financial information is accurate, reliable, and compliant with established standards.
Furthermore, C12 Group's management is responsible for the design, implementation, and maintenance of internal controls. These controls are crucial for ensuring that the financial statements are free from material misstatements, whether those misstatements arise from fraud or error. Internal controls are processes and procedures put in place to safeguard assets, ensure the accuracy of financial records, and prevent and detect fraud.
In addition to these responsibilities, management is also required to evaluate 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 that the financial statements are available to be issued. This involves assessing the company's financial health and its ability to meet its obligations in the foreseeable future. This evaluation is a critical component of financial reporting and helps stakeholders understand the company's financial stability and long-term viability.
These responsibilities are standard for management in most organizations and are not unique to C12 Group. However, it is important for prospective franchisees to understand that the franchisor's financial statements are prepared and presented under these guidelines, which are verified by an independent audit. This provides a level of assurance regarding the accuracy and reliability of the financial information presented in the FDD.