What is management's responsibility regarding internal control relevant to the preparation of financial statements for Aryes Franchising, LLC, the franchisor of C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
nt ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
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 Aryes Franchising, LLC'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.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, management is responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the company's financial statements. This includes ensuring that the financial statements are free from material misstatement, whether due to fraud or error. Management is also responsible for preparing and fairly presenting the financial statements in accordance with generally accepted accounting principles in the United States of America.
In preparing the financial statements, C3 Wellness Spa's management must evaluate whether there are conditions or events that, considered in the aggregate, 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. This assessment is a critical part of ensuring the accuracy and reliability of the financial statements.
An independent auditor, Metwally CPA PLLC, conducted the audit of Aryes Franchising, LLC's financial statements. The auditor's responsibilities include obtaining 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 Aryes Franchising, LLC's internal control. The auditor's report explicitly states that no such opinion is expressed.