---
title: "Check the solvency statement and financial reports before the disclosure document is given"
url: "https://ailawframework.com/practice/franchising-and-distribution/check-the-solvency-statement-and-financial-reports-before-the-disclosure"
type: "task"
site: "AI Law Framework"
id: "A34-OB20261022-2"
practice_area: "Franchising & Distribution"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Check the solvency statement and financial reports before the disclosure document is given

> From the draft disclosure document, list whether the financial-details section contains a solvency statement, financial reports and an independent audit report, and the period each report covers.…

Canonical page: https://ailawframework.com/practice/franchising-and-distribution/check-the-solvency-statement-and-financial-reports-before-the-disclosure  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Franchising & Distribution](https://ailawframework.com/practice/franchising-and-distribution.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | From the draft disclosure document, list whether the financial-details section contains a solvency statement, financial reports and an independent audit report, and the period each report covers. Quote any statement that figures are missing. Do not calculate a due date for the annual update. |
| What the lawyer must review | The lawyer decides whether the financial details can be given to this prospective franchisee, and whether a new financial fact has to be given, with replacement documents, before signing. The lawyer does not invent a calendar due date. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Lawyer review required**

The responsible lawyer checks the solvency statement, the reports and the audit report before the document goes out.

- What the AI does: From the draft disclosure document, list whether the financial-details section contains a solvency statement, financial reports and an independent audit report, and the period each report covers. Quote any statement that figures are missing. Do not calculate a due date for the annual update.
- What the lawyer does: The lawyer decides whether the financial details can be given to this prospective franchisee, and whether a new financial fact has to be given, with replacement documents, before signing. The lawyer does not invent a calendar due date.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. Do not write a due date. The page says the annual update date depends on several factors.
2. Do not apply the four-month specific-purpose fund rule to the disclosure document.
3. If the financial details changed after the draft was prepared, the prospective franchisee needs the new documents before signing.
4. Leave the 14-day notice to existing franchisees to the catalogue task on materially relevant facts.

## Notes

- These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.

## Sources

- [ACCC, information and document obligations under the Franchising Code](https://www.accc.gov.au/business/industry-codes/franchising-code-of-conduct/information-and-document-obligations-under-the-franchising-code) (checked 2026-10-22)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/franchising-and-distribution/check-the-solvency-statement-and-financial-reports-before-the-disclosure/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*