What is the auditor's responsibility regarding internal controls at Canine Dimensions?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, I:
- Exercise professional judgment and maintain professional skepticism throughout the audit
- Identify and assess the risks of material misstatements of the financial statements, whether due to fraud or error and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the 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 CANINE DIMENSIONS FRANCHISING LLC internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in my judgment, there are no conditions or events, considered in the aggregate, that raise substantial doubt about CANINE DIMENSIONS FRANCHISING LLC LLC ability to continue as a going concern for a reasonable period of time.
I am 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 I identified during the audit.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal controls is to obtain an understanding of internal control relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances, but it is explicitly not for the purpose of expressing an opinion on the effectiveness of Canine Dimensions' internal control. Therefore, the auditor's report will not include an opinion on the effectiveness of Canine Dimensions' internal controls.
The auditor's focus is on designing audit procedures that address the risks of material misstatement in the financial statements, whether due to fraud or error. The auditor assesses these risks and examines evidence regarding the amounts and disclosures in the financial statements on a test basis. This process helps the auditor form an opinion on whether the financial statements present fairly the financial position of Canine Dimensions.
Furthermore, the auditor is required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. This communication ensures that relevant parties are informed about the audit process and any significant issues that arise. The auditor's responsibilities are carried out in accordance with generally accepted auditing standards.