What is the auditor's responsibility regarding Dryject Management, LLC's internal control during the audit?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
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 DryJect Management, LLC's internal control.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the auditor's responsibility regarding the company's internal control 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, but it is explicitly not for the purpose of expressing an opinion on the effectiveness of DryJect Management, LLC's internal control. The auditor's report clearly states that no such opinion is expressed.
In simpler terms, the auditor needs to know enough about Dryject's internal controls to plan and perform an effective audit, but they are not evaluating or certifying the quality of those controls. The auditor's focus is on whether the financial statements are free from material misstatement.
This is a standard practice in financial auditing. The auditor's primary goal is to provide an opinion on the fairness of the financial statements, not to provide assurance on the effectiveness of internal controls. However, the auditor is required to communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that were identified during the audit.
For a prospective Dryject franchisee, this means that the financial statements have been audited, but there is no independent assessment of the strength of Dryject's internal controls. A franchisee may want to inquire further about the company's internal controls and risk management practices to gain a better understanding of the financial stability and operational efficiency of the franchisor.