What is Pearce Bespoke's management responsible for regarding internal control related to financial statements?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Pearce Bespoke Franchising, LLC's ability to continue as a going concern for one year after the date that the financial statements are issued.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
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 financial statements. This ensures the financial statements are free from material misstatement, whether due to fraud or error. This responsibility is in accordance with accounting principles generally accepted in the United States of America.
Pearce Bespoke's management must evaluate whether conditions or events, considered in the aggregate, raise substantial doubt about the company's ability to continue as a going concern for one year after the financial statements are issued. This evaluation is a critical component of preparing the financial statements and ensuring their accuracy and reliability.
In practical terms, this means Pearce Bespoke's management must establish and maintain a system of internal controls that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls help to prevent and detect errors and fraud, ensuring that the financial information presented to potential franchisees and other stakeholders is accurate and trustworthy. Prospective franchisees should be aware that the accuracy and reliability of the financial statements depend heavily on the effectiveness of these internal controls.