What ethical requirements are the auditors of Clear Pest Pros required to meet?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
inciples generally accepted in the United States of America.
Basis for Opinion
We conducted our audit 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 the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Matter
The 2023 and 2022 consolidated financial statements of the Company were audited by other auditors, whose report dated March 22, 2024 expressed an unmodified opinion on those statements with emphasis of matters related to the restatement of 2022 financial statements to correct a misstatement and an impairment loss to goodwill during 2023. Neither of these emphasis of matters modified the predecessor auditor opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, the auditors are required to be independent of the company, BFG Holdco, Inc., and to meet other ethical responsibilities in accordance with the relevant ethical requirements relating to their audit. This ensures that the audit is conducted without bias or conflicts of interest, providing a more reliable assessment of the company's financial statements.
The auditors' responsibilities include exercising professional judgment and maintaining professional skepticism throughout the audit. They must identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. These procedures involve examining evidence regarding the amounts and disclosures in the financial statements on a test basis.
Furthermore, the auditors are required to obtain an understanding of internal control relevant to the audit to design appropriate audit procedures. They evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as the overall presentation of the financial statements. The auditors must also conclude whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern.
Finally, the auditors are required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. This communication ensures transparency and provides an opportunity for those charged with governance to address any concerns or issues raised by the auditors.