What internal controls are management responsible for designing, implementing, and maintaining at Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
ties for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of Gold Star Chili, Inc., its subsidiary, TCWW, LLC, and its consolidated entity, GCS Properties, LLC, and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As described in the notes to the consolidated financial statements, the previously issued consolidated financial statements for the year ended December 31, 2022 have been restated for the correction of material misstatements. Our opinion is not modified with respect to those matters.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Gold Star Chili, Inc., its subsidiary, TCWW, LLC and its consolidated entity, GCS Properties, LLC's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 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 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.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of consolidated financial statements. These controls are designed to ensure the financial statements are free from material misstatement, whether due to fraud or error. This responsibility is a standard practice in corporate governance, ensuring the accuracy and reliability of financial reporting.
Specifically, Gold Star's management must evaluate whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern within one year after the financial statements are issued. This evaluation is crucial for providing stakeholders with a clear understanding of the company's financial health and stability. The auditor's role is to obtain reasonable assurance that the financial statements are free from material misstatement, but this is not a guarantee, especially in cases involving fraud.
Furthermore, the auditor's responsibilities include understanding internal controls relevant to the audit to design appropriate audit procedures. However, the auditor does not express an opinion on the effectiveness of Gold Star's internal controls. Instead, they evaluate the appropriateness of accounting policies, the reasonableness of significant accounting estimates, and the overall presentation of the financial statements. This process ensures that the financial statements are presented fairly and in accordance with generally accepted accounting principles.