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ARTICLE · 01 MARCH 2012

Auditor's reports and Guidance Statement (GS018)

Norton Rose Fulbright Australia
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GS018 means that the form of audit report for franchisors to support their financial positions may not be sufficient.

AustraliaCorporate/Commercial Law
Allison McLeod (Formerly With Norton Rose Fulbright Australia)
Allison McLeod (Formerly With Norton Rose Fulbright Australia)
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Franchisors are well aware that they are required, under the terms of the Franchising Code of Conduct, to provide certain financial information with their disclosure document. However, the introduction of Guidance Statement GS 018 means that the form of audit report many franchisors have relied on for years to support their financial position may no longer be sufficient.

Under section 20.1 of an Annexure one disclosure document at least one director of the franchisor must provide a statement as to whether, in the director's opinion, there are reasonable grounds to believe that the franchisor will be able to pay its debts as an when they fall due. This statement must be supported by either:

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