Are there any disclaimers related to the accuracy of the Dryject Management, LLC balance sheets?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
My 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 my 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.
In performing an audit in accordance with generally accepted auditing standards, I:
- 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 DryJect Management, 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 my judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about DryJect Management, LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the independent auditor's report includes a statement clarifying the level of assurance provided regarding the financial statements. While the auditor aims to obtain reasonable assurance that the financial statements are free from material misstatement, this assurance is not absolute. This means that even with an audit conducted according to generally accepted auditing standards, there is no guarantee that all material misstatements will be detected. The auditor's responsibility is to express an opinion on whether the financial statements present fairly the financial position of Dryject.
The auditor notes that the risk of not detecting a material misstatement resulting from fraud is higher than that of one resulting from error. This is because fraud may involve intentional actions like collusion, forgery, intentional omissions, misrepresentations, or the overriding of internal controls, which are designed to prevent errors. The auditor's procedures include examining evidence on a test basis and evaluating the appropriateness of accounting policies and the reasonableness of management's estimates.
For a prospective Dryject franchisee, this means that while the financial statements have been audited by an independent CPA, there is still a degree of risk that material misstatements, especially those resulting from fraud, may not have been detected. Therefore, it is crucial to carefully review the financial statements and consider seeking advice from a financial professional to fully understand the financial position of Dryject. This is a standard disclaimer in audited financial statements, reflecting the inherent limitations of the auditing process.