What is the auditor's responsibility regarding Hydrodog's internal controls?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Legacy Franchisors LLC D/B/A Hydrodog's internal control. Accordingly, no such opinion is expressed.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the auditor's responsibility regarding internal controls is to obtain an understanding of internal control relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances, but it is not for the purpose of expressing an opinion on the effectiveness of Hydrodog's internal control. Therefore, the auditor does not express an opinion on the effectiveness of Hydrodog's internal controls.
This means that while the auditor assesses Hydrodog's internal controls to plan the audit, they are not providing a guarantee that those controls are effective. The auditor's focus is on whether the financial statements are free from material misstatement.
Prospective franchisees should be aware that the audit provides assurance on the financial statements but not on the strength of Hydrodog's internal processes and procedures. If a franchisee wants to understand the effectiveness of Hydrodog's internal controls, they may need to conduct their own due diligence or seek additional information from Hydrodog.