Is the auditing firm required to be independent from Coffee News USA, Inc. during the audit?

According to Coffee News's 2025 Franchise Disclosure Document, the auditing firm is required to be independent from Coffee News USA, Inc. The Independent Auditor's Report states that the audits were conducted in accordance with auditing standards generally accepted in the United States of America, which require the auditor to be independent. The report also mentions that the auditing firm must meet other ethical responsibilities in accordance with relevant ethical requirements relating to their audits.

This independence is a standard practice in financial auditing to ensure objectivity and unbiased reporting. It means the auditing firm should have no financial, personal, or professional relationships with Coffee News that could compromise their judgment or create a conflict of interest. This requirement helps to assure prospective franchisees that the financial statements of Coffee News are fairly presented and can be relied upon for making informed decisions.

The auditor's responsibilities include obtaining reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error. They must exercise professional judgment and maintain professional skepticism throughout the audit, identify and assess risks of material misstatement, and obtain an understanding of internal control relevant to the audit. These responsibilities are designed to provide a high level of confidence in the accuracy and reliability of the financial statements.

Overall, the explicit requirement for auditor independence in the Coffee News FDD provides an additional layer of assurance for potential franchisees. It confirms that the financial information presented has been reviewed by an objective third party, enhancing the credibility of the financial statements and supporting informed investment decisions.