What is the auditor's responsibility regarding internal controls during the audit of Crave's financial statements?

According to Crave's 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal controls is to obtain an understanding of internal control relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances. However, the audit is not performed for the purpose of expressing an opinion on the effectiveness of Crave's internal control, and therefore, no such opinion is expressed.

The auditor's procedures include identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, and designing and performing audit procedures responsive to those risks. These procedures involve examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

In summary, while the auditor must understand Crave's internal controls to tailor the audit approach, the audit's objective is not to evaluate or provide assurance on the effectiveness of those controls. A prospective franchisee should be aware that the financial statements have been audited, but the audit does not guarantee the absence of internal control weaknesses.