What is the auditor's responsibility regarding internal control when auditing Cicis' financial statements?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the Company's internal control. Accordingly, no such opinion is expressed.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal control 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 auditor's responsibility does not extend to expressing an opinion on the effectiveness of Cicis' internal control, and the auditor's report will not include such an opinion.
In simpler terms, the auditor reviews Cicis' internal controls to plan the audit effectively, but they don't provide a separate assessment or guarantee about how well those controls work. The auditor's focus is on whether the financial statements are free from material misstatement.
For a prospective Cicis franchisee, this means that the financial statements have been audited by an independent firm, but the audit does not provide assurance that Cicis' internal controls are effective. A franchisee may want to conduct their own due diligence into Cicis' financial and operational controls.