When auditing Carvel's financial statements, is the auditor required to express an opinion on the effectiveness of the company's internal control?

According to Carvel's 2025 Franchise Disclosure Document, the auditor is not required to express an opinion on the effectiveness of the company's internal control. While the auditor must gain an understanding of internal controls relevant to the audit to design appropriate procedures, the audit's purpose is not to evaluate the overall effectiveness of these controls.

Specifically, the auditor's responsibilities include obtaining reasonable assurance that the consolidated financial statements are free from material misstatement, whether due to fraud or error, and issuing an auditor's report that includes their opinion. The auditor identifies and assesses the risks of material misstatement, examines evidence regarding the amounts and disclosures in the financial statements, and evaluates the appropriateness of accounting policies and the reasonableness of significant accounting estimates.

However, the auditor's understanding of internal control is solely for the purpose of designing audit procedures appropriate to the circumstances, and not for expressing an opinion on the effectiveness of the company's internal control. The document explicitly states that 'no such opinion is expressed.' This means a potential Carvel franchisee should not expect the audit to provide assurance about the strength of Carvel's internal controls.