Do the auditors express an opinion on the effectiveness of Even Hotels' internal control?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
rovide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
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 the Company's ability to continue as a going concern for one year after the date the financial statements are available to be issued.
Auditors' 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 auditors' 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 US GAAS 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 US GAAS, we:
PricewaterhouseCoopers LLP, 1075 Peachtree Street NE, Atlanta, Georgia 30309 T: (678) 419 1000, www.pwc.com/us
- 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.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to the 2025 FDD, the auditors auditing the financial statements of Holiday Hospitality Franchising, LLC, do not express an opinion on the effectiveness of the company's internal control. Instead, their audit procedures are designed to understand internal control relevant to the audit, but not for the purpose of expressing an opinion on its effectiveness.
This means that while the auditors consider internal controls to design their audit approach, they do not specifically evaluate whether those controls are well-designed or operating effectively. The auditors' focus is on whether the financial statements are free from material misstatement.
For a prospective Even Hotels franchisee, this implies that the financial statements have been reviewed for accuracy, but there is no independent assessment of the strength of the company's internal controls over financial reporting. A franchisee may want to inquire separately about the internal controls and risk management procedures in place at Even Hotels.