Is the auditing firm required to be independent of Pearce Bespoke Franchising, LLC during the audit?

Yes, according to Pearce Bespoke's 2025 Franchise Disclosure Document, the auditing firm is required to be independent. The Independent Auditor's Report states that the audit was conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). As part of these standards, the auditor is required to be independent of Pearce Bespoke Franchising, LLC and to meet ethical responsibilities relevant to the audit. This requirement ensures that the auditor can perform an unbiased and objective assessment of Pearce Bespoke's financial statements.

This independence is crucial for maintaining the integrity and credibility of the financial statements. It assures potential franchisees that the financial information presented by Pearce Bespoke has been reviewed by an impartial third party. The auditor's opinion provides a level of confidence that the financial statements fairly represent the financial position of Pearce Bespoke as of December 31, 2024, and the results of its operations and cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America.

The auditor's responsibilities include obtaining reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and issuing an auditor's report that includes their opinion. They must exercise professional judgment, maintain professional skepticism, assess the risks of material misstatement, and evaluate the appropriateness of accounting policies used by Pearce Bespoke. Furthermore, the auditor must communicate with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit.

For a prospective Pearce Bespoke franchisee, this requirement of auditor independence is a positive sign. It suggests that Pearce Bespoke is committed to transparency and accountability in its financial reporting. Franchisees can have greater confidence in the financial information provided in the FDD, which can inform their decision-making process. It is a standard practice in franchising to have audited financial statements to ensure potential franchisees have reliable information.