What is the significance of the auditor being ADKF, P.C. for C12 Group?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
onsidered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
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\nerror, and design and perform audit procedures responsive to those risks. Such procedures include\nexamining, on a test basis, evidence regarding the amounts and disclosures in the combined 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 Company's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting\nestimates made by management, as well as evaluate the overall presentation of the combined financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
ADKF, P.C.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, ADKF, P.C. is the independent auditor for the company. Their role is to audit C12 Group's financial statements, providing an opinion on whether these statements fairly represent the company's financial position and performance in accordance with generally accepted accounting principles in the United States of America. ADKF, P.C. issued an opinion on March 21, 2025, regarding the balance sheets from December 31, 2024, and 2023.
ADKF, P.C.'s responsibilities include obtaining reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. They exercise professional judgment, assess risks, and evaluate the appropriateness of accounting policies. They also obtain an understanding of C12 Group's internal controls but do not express an opinion on their effectiveness. The auditor communicates with those charged with governance regarding the audit's scope, findings, and internal control matters.
For a prospective C12 Group franchisee, the engagement of an independent auditor like ADKF, P.C. adds credibility to the financial statements presented in the FDD. This helps the franchisee make a more informed decision, relying on an unbiased assessment of the company's financial health. It is important to note that while the auditor provides reasonable assurance, it is not a guarantee against all misstatements, especially those resulting from fraud.
Prior to ADKF, P.C., the financial statements for the year ended December 31, 2022, were audited by other auditors, who issued an unmodified opinion on March 15, 2023. The presence of an independent auditor and their report is a standard practice in franchising, ensuring transparency and reliability of financial information for potential franchisees.