What is the purpose of including financial statements in the Crepe De Licious FDD?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
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 Auditor's Responsibilities for the Audits of the Financial Statements section of our report. We are required to be independent of Crepe Delicious Holding USA, Inc. 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 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 Crepe Delicious Holding USA, Inc.'s ability to continue as a going concern for one year after the date that the financial statements are issued.
Auditor's Responsibilities for the Audits 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 auditor's 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.
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 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, the inclusion of financial statements serves multiple purposes related to providing assurance about the company's financial health and reporting practices. Management is responsible for preparing and fairly presenting the financial statements according to accounting principles generally accepted in the United States of America. This includes designing, implementing, and maintaining internal controls to ensure the financial statements are free from material misstatements, whether due to fraud or error. Management must also evaluate whether there are conditions that raise substantial doubt about Crepe De Licious's ability to continue as a going concern for one year after the financial statements are issued.
Furthermore, the financial statements are audited by an independent auditor. The auditor's objectives are to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion. The auditor's responsibilities include exercising professional judgment, assessing the risks of material misstatement, understanding internal controls, evaluating accounting policies, and concluding on the company's ability to continue as a going concern. The auditor's report provides an opinion on whether the financial statements are fairly stated in all material respects.
In addition, the financial statements include information about revenue recognition, specifically how Crepe De Licious recognizes revenue from franchise fees, royalties, and sales of creperie products. The company accounts for contracts when approval and commitment are obtained from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. This provides transparency into how Crepe De Licious generates revenue and manages its financial obligations. The financial statements also include information on income taxes, including current and deferred income taxes, and any reclassifications made for comparative purposes.