What internal controls are management responsible for regarding Itan's financial statements?

According to Itan'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 the company's financial statements. This ensures the financial statements are free from material misstatement, whether due to fraud or error. Additionally, management must evaluate conditions or events that could raise substantial doubt about Itan's ability to continue as a going concern within one year after the financial statements are issued.

In simpler terms, Itan's management must create and maintain systems to ensure the accuracy and reliability of their financial reporting. These controls are designed to prevent errors or fraud that could significantly impact the financial statements. This responsibility also includes assessing Itan's financial stability and ability to operate in the near future.

For a prospective franchisee, this indicates that Itan's management takes responsibility for the accuracy and reliability of the financial information provided. This can be reassuring, as it suggests that the company has processes in place to prevent financial misstatements. However, it is important to note that the auditor does not express an opinion on the effectiveness of Itan's internal controls, so franchisees should still conduct their own due diligence.

It's worth noting that while management is responsible for these controls, an independent auditor reviews the financial statements. The auditor's role is to obtain reasonable assurance that the financial statements are free from material misstatement, but this is not an absolute guarantee. The auditor's responsibilities include understanding Itan's internal controls to design appropriate audit procedures, but not to provide an opinion on their effectiveness.