Does the audit of Deer Solution Franchising, LLC include expressing an opinion on the effectiveness of the company's internal control?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, 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. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Deer Solution Franchising, LLC's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Deer Solution Franchising, LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the audit performed on Deer Solution Franchising, LLC does not include expressing an opinion on the effectiveness of the company's internal control. The auditors obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. However, this understanding is not for the purpose of expressing an opinion on the effectiveness of Deer Solution's internal control, and accordingly, no such opinion is expressed.
This means that while the auditors review Deer Solution's internal controls to plan their audit procedures, they do not provide a separate, formal opinion on whether those controls are effective. A prospective franchisee should understand that the audit focuses on the accuracy of the financial statements, not on the strength of the company's internal control systems.
This is a fairly standard practice in franchise auditing. Franchisees who want to assess the strength of Deer Solution's internal controls should consider asking the franchisor directly about their internal control practices and procedures.