What is the auditor's responsibility regarding accounting policies used by Cool Binz when auditing the consolidated financial statements?

Based on the 2025 Cool Binz Franchise Disclosure Document, the document outlines Cool Binz's right to audit franchisees but does not specify the auditor's responsibility regarding accounting policies used by Cool Binz when auditing the consolidated financial statements.

However, the FDD does state that Cool Binz has the right to inspect and audit any and all financial statements, reports, income tax records, sales tax records, payroll records, software databases, and other records at any time during business hours and without prior notice. Franchisees must cooperate fully with Cool Binz's representatives and independent accountants during any inspection or audit. Cool Binz also requires franchisees to use designated accounting software, currently QuickBooks Online, and follow a specified Chart of Accounts.

The FDD also requires franchisees to furnish various financial statements and reports to Cool Binz, including income statements, profit and loss statements, cash flow statements, and tax returns. These must be provided in the manner and format that Cool Binz requires. If a franchisee fails to comply with any provision of the agreement, Cool Binz can require audited financial statements prepared on an annual basis.

While the FDD details Cool Binz's audit rights and the franchisee's obligations regarding financial reporting, it does not explicitly define the auditor's responsibilities concerning the accounting policies used in preparing consolidated financial statements. A prospective franchisee should seek clarification from Cool Binz regarding the specific scope and standards of any required audits, including the auditor's role in assessing the appropriateness of accounting policies.