Are there any qualifications or disclaimers in the Dryject auditor's opinion?
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 Dry Ject Management, LLC's ability to continue as a going concern for a reasonable period of time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the auditor's report includes qualifications and disclaimers regarding the scope and limitations of the audit. Specifically, the auditor states that while they aim to obtain reasonable assurance that the financial statements are free from material misstatement, this assurance is not absolute. The auditor's report explicitly states that it is not a guarantee that all misstatements will be detected. The auditor also states that the risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error.
Furthermore, the auditor's responsibilities include exercising professional judgment and maintaining professional skepticism, assessing risks of material misstatement, and evaluating the appropriateness of accounting policies. However, the auditor's procedures for obtaining an understanding of internal control are not for the purpose of expressing an opinion on the effectiveness of Dryject's internal control, and accordingly, no such opinion is expressed.
These qualifications and disclaimers are standard in auditor's reports and inform the reader about the inherent limitations of an audit. They highlight that the audit provides a reasonable, but not absolute, level of assurance regarding the accuracy of the financial statements. Prospective Dryject franchisees should understand these limitations when reviewing the financial statements provided in the FDD.