During an audit, is there an opinion expressed on the effectiveness of My Salon Suite's internal control?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud 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 consolidated 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 the Company's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Source: Item 6 — Other Intangibles and Goodwill (FDD pages 274–314)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, the audit performed does not express an opinion on the effectiveness of the company's internal control. While the auditors gain an understanding of internal control relevant to the audit to design appropriate procedures, this is specifically not for the purpose of forming an opinion on the effectiveness of the company's internal control.
During the audit, several procedures are followed in accordance with Generally Accepted Auditing Standards (GAAS). These include exercising professional judgment, assessing risks of material misstatement, examining evidence related to financial statement amounts and disclosures, evaluating accounting policies, and assessing the reasonableness of significant accounting estimates made by management. The auditors also evaluate whether there are conditions that raise substantial doubt about the company's ability to continue as a going concern.
The auditors are required to communicate with those charged with governance regarding the scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. However, the audit's primary objective is to provide an opinion on the fair presentation of the company's financial statements, not on the effectiveness of its internal controls.