Is an opinion expressed on the effectiveness of Chesters International, LLC's internal control during the audit?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, we:
- Exercise professional judgment and maintain professional skepticism throughout the audits.
- Identify and assess the risks of material misstatement 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 audits 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 Chester's International, LLC's internal control. Accordingly, no such opinion is expressed.
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the independent auditor does not express an opinion on the effectiveness of Chester's International, LLC's internal control. The auditors' responsibilities include obtaining an understanding of internal control relevant to the audit to design appropriate audit procedures, but not for the purpose of expressing an opinion on its effectiveness.
This means that while the auditors review Chesters's internal controls to plan their audit, they do not provide a separate assessment or guarantee of how well those controls function. A prospective franchisee should understand that the financial statements are audited for accuracy and fair presentation, but the audit does not specifically evaluate the strength or weaknesses of Chesters's internal systems for preventing fraud or errors.
This is a fairly standard practice in financial auditing. Franchisees who want to gain more comfort may consider asking Chesters for additional information about their internal control environment and risk management practices. However, Chesters is only obligated to provide what is disclosed in the FDD.