What is the purpose of obtaining an understanding of internal control relevant to the audit of Crave Cookies?

According to Crave Cookies's 2025 Franchise Disclosure Document, the purpose of obtaining an understanding of internal control relevant to the audit is to design audit procedures that are appropriate in the circumstances. This understanding is crucial for the auditors to assess the risks of material misstatement of the financial statements, whether due to fraud or error, and to design and perform audit procedures responsive to those risks. These procedures include examining evidence regarding the amounts and disclosures in the financial statements on a test basis.

However, the auditors' understanding of internal control is specifically not for the purpose of expressing an opinion on the effectiveness of Crave Cookies Franchising, LLC's internal control. The document explicitly states that no such opinion is expressed. This means that while the auditors need to understand the internal controls to conduct a proper audit, they are not evaluating or certifying the strength or effectiveness of those controls.

For a prospective Crave Cookies franchisee, this distinction is important. While the financial statements are audited, and the audit process involves understanding internal controls, the FDD does not provide any assurance about the quality of Crave Cookies's internal controls. A potential franchisee may want to ask Crave Cookies for additional information about their internal control policies and procedures to gain a better understanding of the company's financial management practices.