comfort letter

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Comfort letter

A letter from an independent auditor included in a preliminary prospectus stating that, while a full audit has not been undertaken, the auditor has done a 'review' sufficient to assure that financial statement information in the preliminary prospectus is correctly prepared to the best of the auditor's knowledge. The auditor in effect states that, had a full audit been done, they are comfortable that the audited financial statements would not be materially different from the ones presented in the preliminary prospectus.

Comfort Letter

Before or during a new issue, a statement by an auditor stating that, while a full audit has not been done, a review of the issue's prospectus has revealed nothing inaccurate or misleading. The comfort letter also states that the auditor is confident that a full audit would not uncover anything unusual that would negatively affect the issue.

comfort letter

A statement issued by a Certified Public Accountant declaring no indication of false or misleading information in the financial statements being used in connection with a securities offering.
References in periodicals archive ?
Providing various comfort letters (including EMTN and prospectuses for the issuance of loans etc.
The findings, by the International Consortium of Investigative Journalists, are based on a trove of leaked documents that included 548 so-called comfort letters that the group said Luxembourg had provided to corporations seeking favorable tax treatment.
In addition, many CPA firms have begun offering comfort letters for the benefit of production companies and potential buyers of transferable credits.
GAAP accounting, Sarbanes-Oxley internal control and PCAOB auditing standards, financial reporting, SEC reporting, public registration statements, debt offering and comfort letters and mergers and acquisitions.
In prior liaison meetings, TEI has voiced concern about the increasing time lag between the issuance of comfort letters and the adoption of remedial technical legislation.
providing the customary comfort letters the banks seek on capital raisings
While the audit of the historical financial statements remains the most visible service in this process provided by an accounting firm, CPAs also play an active role in the review of filing and disclosure documents, issuance of comfort letters to underwriters, future compliance with Sarbanes-Oxley Sec.
These requirements heighten the scrutiny applied during Rule 144A due diligence and reflect a more formalized process than that associated with typical private placements, in which comfort letters and disclosure letters are generally not rendered.
The American Institute of CPAs auditing standards board has published two statements on auditing standards relating to agreed-upon procedures engagements and one statement on standards for attestation engagements concerning requests for comfort letters.
It is expected that the special committee established by the Board of Directors will complete its investigation of these 'wash trades' in September, after which, new auditors Ernst and Young, will be able to provide comfort letters on behalf of Consumers and PEPL, as well as a consolidated CMS opinion.
Tax rulings are comfort letters by tax authorities giving a specific company clarity on how its corporate tax will be calculated.