Does the audit of Gokhale Method include expressing an opinion on the effectiveness of the company's internal control?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
In performing an audit in accordance with generally accepted auditing standards, 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 Gokhale Method Institute, Inc.'s internal control. Accordingly, no such opinion is expressed.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the audit performed on Gokhale Method Institute, Inc. does not include expressing an opinion on the effectiveness of the company's internal control. The audit aims to obtain an understanding of internal control relevant to the audit to design appropriate audit procedures, but not to provide an opinion on the effectiveness of the internal controls.
This means that while the auditors will assess Gokhale Method's internal controls to the extent necessary to conduct a thorough audit of the financial statements, they will not issue a separate opinion or attestation regarding how well those controls are designed or operating. The auditors' focus is on the accuracy and reliability of the financial statements themselves.
For a prospective franchisee, this indicates that the financial audit provides assurance on the accuracy of the financial statements but does not offer any guarantee about the strength or effectiveness of Gokhale Method's internal controls. A franchisee may want to independently assess the internal controls and operational procedures of Gokhale Method to gain a more complete understanding of the company's risk management and operational efficiency.