What is the auditor's responsibility regarding internal controls at Mr. Sandless Franchise, LLC?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
ud 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 Mr. Sandless Franchise, LLC's internal control. Accordingly, no such opinion is expressed.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to the 2025 FDD, the auditor's responsibility regarding internal controls at Mr. Sandless is to understand the internal controls relevant to the audit. This understanding is used to design audit procedures that are appropriate for the circumstances.
However, the auditor's responsibility does not extend to expressing an opinion on the effectiveness of Mr. Sandless's internal control. The FDD explicitly states that no such opinion is expressed. This means the auditor's focus is on the financial statements themselves, not on providing assurance about the quality of the company's internal control systems.
In addition to understanding internal controls, the auditor is required to communicate with those charged with governance regarding the planned scope and timing of the audit, any significant audit findings, and certain internal control-related matters identified during the audit. This communication ensures that relevant parties are informed about the audit process and any issues that may arise. Management is responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.