Who must prepare the annual financial statements for a Deer Solution franchise?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Deer Solution Franchising, LLC's ability to continue as a going concern within 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 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 generally accepted auditing standards 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.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the company's management is responsible for preparing the financial statements. This responsibility includes ensuring the statements are presented fairly and in accordance with generally accepted accounting principles (GAAP) in the United States. Management is also tasked with designing, implementing, and maintaining internal controls relevant to the preparation and presentation of these financial statements, ensuring they are free from material misstatements, whether due to fraud or error.
Furthermore, Deer Solution's management must evaluate whether there are conditions or events that could raise substantial doubt about the company's ability to continue as a going concern within one year after the financial statements are issued. This involves a comprehensive assessment of the company's financial health and future prospects.
An independent auditor then audits these financial statements. The auditor's role is 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 on the fairness of the presentation of the financial statements. This audit is conducted in accordance with generally accepted auditing standards in the United States, requiring the auditor to exercise professional judgment and maintain professional skepticism throughout the audit process.
In summary, while Deer Solution's management prepares the financial statements, an independent auditor provides an opinion on those statements, adding a layer of assurance and credibility. This is a standard practice to ensure transparency and reliability in financial reporting.