What is the auditor's responsibility regarding Chesters' internal controls during the audit?

According to Chesters'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. However, the audit is not performed for the purpose of expressing an opinion on the effectiveness of Chesters's internal control, and therefore, no such opinion is expressed. The auditor's objective is to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion.

Reasonable assurance is defined as a high level of assurance, but it is not absolute, and there is no guarantee that an audit conducted according to generally accepted auditing standards will always detect a material misstatement. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error because fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

The auditor is also required to communicate with those charged with governance regarding the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters identified during the audits. This communication ensures that relevant parties are informed about the audit process and any significant issues that arise.