comfort letter(redirected from Comfort Letters)
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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.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.