Does the Counselor Realty FDD specify any exceptions to the auditing standards used?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
AP).
Basis for Opinion
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 Auditors' 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 audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with GAAP, and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the 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 financial statements are available to be issued.
Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, the financial statements of Counselor Realty Franchising, Inc. have been audited in accordance with auditing standards generally accepted in the United States of America (GAAS). The auditor's report states that they believe the audit evidence obtained is sufficient and appropriate to provide a basis for their audit opinion. The report does not explicitly state any exceptions to these auditing standards.
The auditors' responsibilities include obtaining reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and issuing an auditor's report that includes their opinion. However, reasonable assurance is not absolute, and there is a risk that a material misstatement may not always be detected. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error.
The audit involves exercising professional judgment and maintaining professional skepticism, identifying and assessing risks of material misstatement, examining evidence on a test basis, understanding internal control relevant to the audit (without expressing an opinion on its effectiveness), evaluating the appropriateness of accounting policies, and concluding on the company's ability to continue as a going concern. 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.
Prospective franchisees should be aware that while the audit aims to provide reasonable assurance, it is not a guarantee against all misstatements. The financial statements are the responsibility of Counselor Realty's management, who are responsible for their preparation and fair presentation in accordance with GAAP and for maintaining internal control relevant to the preparation of financial statements.