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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
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.
References in periodicals archive ?
Comfort letter requests increasingly come from a wide variety of sources, most commonly lenders, insurance providers, employers, and various government agencies.
Egyptian Refining Company (ERC), a core platform company of Citadel Capital has received official renewal of the Government of Egypt's comfort letter for the strategic national project.
The comfort letter included a clause which prevented Sir Stelios from speaking negatively about the airline, while also preventing him from either setting up a rival airline or becoming a significant holder in another carrier.
Owing to a succession of minority government during the past several years, it has been difficult for the Government to enact legislation of any stripe, including technical amendments implementing comfort letter interpretations.
Easyjet said last week Sir Stelios alleges the directors breached the terms of a 'comfort letter' dated last October by allegedly failing to remain committed to enhancing the Easyjet brand's reputation.
Among these developments is the removal of Heikal's name from the list of individuals prohibited from traveling outside of Egypt, the company's receipt of a "comfort letter" from the Petroleum ministry for the Egyptian Refining Company, and the company's ranking as the largest private equity firm in Africa for the third year.
The government gave a comfort letter guaranteeing that PLN would meet its obligation to the investors.
On the issue of comfort letter, the source said as per this letter, the Government of Pakistan would have to allow a third country to import gas through IP pipeline in the event of any such country joining the project in the future.
Palestinian prime minister Salam Fayyad has appealed to the World Bank to help him secure emergency financing to bridge a shortfall in donor funds and pay public workers, Palestinian and European sources said yesterday.Fayyad is seeking a so-called comfort letter from the Washington-based international lending agency to obtain short-term private bank funding, the sources said, speaking on condition of anonymity.The unusual appeal underscores the extent of the Palestinian Authority's budget crisis despite billions of dollars in aid pledged last year to support a US-backed peace drive.The Palestinian Authority's workers are due to be paid in the first week of each month.
Underwriters are required to obtain a comfort letter from the accountants as part of their due diligence under the securities laws.
FEE backs a standard pan-European comfort letter formula, drawing on the current widely-used system of due diligence.
As part of the due diligence process, the initial purchasers, like underwriters in a registered offering, require, as a matter of practice and custom, an accountant's comfort letter on all financial information contained in the OC, and disclosure or negative assurance letters from both the initial purchasers' and the company's respective counsel.