What is management responsible for designing, implementing, and maintaining regarding internal control for Pearce Bespoke's financial statements?

According to Pearce Bespoke'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 includes ensuring that the financial statements are free from material misstatement, whether due to fraud or error, and are presented in accordance with accounting principles generally accepted in the United States of America.

In practical terms, this means Pearce Bespoke's management must establish and oversee procedures and policies that ensure the accuracy and reliability of financial reporting. These controls are designed to prevent and detect errors or fraudulent activities that could significantly impact the financial statements. The effectiveness of these internal controls is crucial for maintaining the integrity of the financial information provided to potential franchisees and other stakeholders.

Prospective franchisees should understand that while an independent auditor reviews Pearce Bespoke's financial statements, the primary responsibility for the accuracy and reliability of these statements rests with the company's management. The auditor's role is to provide an opinion on whether the financial statements present fairly the company's financial position, but they do not express an opinion on the effectiveness of Pearce Bespoke's internal controls. Therefore, it is important for franchisees to consider the strength and reliability of the company's management and their commitment to maintaining sound financial practices.