What is the auditor's responsibility regarding Expense Reduction Analysts' internal controls?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with GAAS, we:
- 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 Expense Reduction Analysts, Inc. and subsidiaries' internal control. Accordingly, no such opinion is expressed.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal controls is explicitly limited. The auditor's role is to gain an understanding of Expense Reduction Analysts' internal control system as it relates to the audit process. This understanding is used to design audit procedures that are appropriate for the given circumstances.
However, the auditor's responsibility does not extend to expressing an opinion on the effectiveness of Expense Reduction Analysts' internal control systems. The document explicitly states that no such opinion is expressed. This means that while the auditors consider internal controls when planning and executing their audit, they do not provide a separate assessment or guarantee regarding the strength or reliability of those controls.
For a prospective franchisee, this implies that the financial statements have been audited, but there is no independent verification of the effectiveness of Expense Reduction Analysts' internal controls. A franchisee may want to conduct their own due diligence into the company's financial processes and risk management practices.