Is the auditor expressing an opinion on the effectiveness of Focalpoint Coaching, Inc.'s internal control?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with generally accepted auditing standards, we:
- 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 FocalPoint Coaching, Inc.'s internal control. Accordingly, no such opinion is expressed.
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the auditor's report explicitly states that while they obtain an understanding of internal control relevant to the audit, it is not for the purpose of expressing an opinion on the effectiveness of FocalPoint Coaching, Inc.'s internal control. Therefore, the auditor does not express such an opinion. The auditor's 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 their opinion.
This means that the audit focuses on the accuracy and reliability of the financial statements presented by Focalpoint Coaching, rather than evaluating the strength or weaknesses of the company's internal controls. While the auditors do assess internal controls to design appropriate audit procedures, this assessment is solely for the purpose of conducting the financial audit.
For a prospective franchisee, this implies that the financial statements have been reviewed for accuracy, but there is no independent assessment of how well Focalpoint Coaching manages its internal financial processes and risks. A potential franchisee may want to ask Focalpoint Coaching about their internal control policies and procedures as part of their due diligence.