What level of assurance does an audit provide for Crab N Spice's financial statements?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
1 (815) 348-2421 omar@napercpa.com
INDEPENDENT ACCOUNTANT AUDIT REPORT
To the Management of CRAB N SPICE GROUP
Opinion
We have audited the financial statements of CRAB N SPICE GROUP (the "Company"), which comprise the Balance Sheet as of December 31, 2023 & December 31, 2022 & December 31, 2021, the related Profit & Loss Statements, the related Statements of Cashflows, the related Statements of Shareholders' Equity, and the related notes for the twelve-month periods then ended. (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 & December 31, 2022 & December 31, 2021, and the results of its operations and its cash flows for the twelve-month periods then ended in accordance with accounting principles 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 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 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 financial statements that are free of 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 for one year after the date that the financial statements are available to be issued.
Auditor's 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 of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 40–50)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, the company's financial statements for the years ending December 31, 2023, 2022, and 2021 have been audited by an independent accountant. The audit provides an opinion that the financial statements present fairly, in all material respects, the financial position of Crab N Spice as of those dates, and the results of its operations and cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America. This means that an objective third party has reviewed Crab N Spice's financial records and believes they are presented accurately.
The audit was conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). These standards require the auditor to be independent of the company and to have obtained sufficient and appropriate audit evidence to provide a basis for their opinion. The auditor's responsibilities include identifying and assessing the risks of material misstatement of the financial statements, examining evidence on a test basis, understanding internal control relevant to the audit, evaluating the appropriateness of accounting policies, and concluding on the company's ability to continue as a going concern.
For a prospective franchisee, this independent audit provides a higher level of confidence in the accuracy and reliability of Crab N Spice's reported financial performance. While an audit does not guarantee that there are no errors or fraud, it does provide reasonable assurance that the financial statements are presented fairly in all material respects. This is more assurance than provided by a compilation or review, where the accountant does not express an opinion on the financial statements. Franchisees should still carefully review the entire FDD and consult with their own financial advisors, but the presence of an audit is a positive sign.