What is the purpose of examining evidence regarding amounts and disclosures in C12 Group's financial statements?

According to C12 Group's 2025 Franchise Disclosure Document, examining evidence regarding amounts and disclosures in the financial statements is part of the audit procedures conducted by the independent auditor. The purpose of these procedures is to assess the risks of material misstatement in the financial statements, whether due to fraud or error. This examination is performed on a test basis, meaning not every single transaction is reviewed, but rather a sample is analyzed to provide a reasonable basis for the auditor's opinion.

This process helps the auditor form an opinion on whether the financial statements present fairly the financial position, results of operations, and cash flows of C12 Group in accordance with generally accepted accounting principles. The auditor's report provides assurance to users of the financial statements, including potential franchisees, that the information presented is reliable and fairly stated. However, it's important to note that reasonable assurance is not absolute, and there's always a risk that a material misstatement may not be detected.

For a prospective C12 Group franchisee, this means that the financial statements included in the FDD have been reviewed by an independent auditor who has examined evidence supporting the amounts and disclosures presented. This provides a level of confidence in the accuracy and reliability of the financial information. Franchisees can use this information to assess the financial health and stability of C12 Group and make informed decisions about investing in a franchise. It is important for potential franchisees to carefully review the financial statements and the auditor's report, and to seek professional advice if needed, to fully understand the financial condition of the franchisor.