What ethical requirements are the auditors of City Publications required to meet?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of CITY PUBLICATIONS FRANCHISE GROUP, INC. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Matter
The financial statements of CITY PUBLICATIONS FRANCHISE GROUP, INC. for the year ended December 31, 2022, were audited by another auditor who expressed an unmodified opinion on those statements on March 15, 2023.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the auditors must adhere to specific ethical requirements related to their audit of the company's financial statements. The auditors are required to be independent of City Publications and fulfill other ethical responsibilities in accordance with the relevant ethical standards that pertain to their audits. These standards are based on auditing standards generally accepted in the United States of America (GAAS).
In practical terms, this means the auditors must maintain objectivity and impartiality throughout the audit process. They cannot have any financial or personal relationships with City Publications that could compromise their professional judgment. The requirement to meet ethical responsibilities ensures that the audit is conducted with integrity and that the auditor's opinion on the financial statements is unbiased and reliable.
This requirement is important for prospective franchisees because it provides assurance that the financial information presented by City Publications has been reviewed by an independent party adhering to strict ethical guidelines. This helps to ensure the accuracy and reliability of the financial statements, which are crucial for making informed investment decisions. Franchisees can have more confidence in the financial health and stability of City Publications knowing that the audit was conducted ethically and independently.
It is worth noting that the FDD mentions that the financial statements for the year ended December 31, 2022, were audited by another auditor who expressed an unmodified opinion on those statements on March 15, 2023. This indicates a change in auditors, which is not uncommon but could be a point of inquiry for a prospective franchisee to understand the reasons behind the change.