Comfort Letter

Comfort Letter

A Comfort Letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company. [cite book | last =Random House | title = Random House Webster's Unabridged Dictionary | publisher = Random House Reference | date = 2005 | isbn = 0375426051] The comfort letter can be issued by a CPA declaring no indication of false or misleading information in the financial statements and that the company's prospectus follows GAAP. This is sometimes used in connection with an initial public offering. [cite book | last =Scott | first =David L. | title =Wall Street Words | publisher =Houghton Mifflin | date =1998 | isbn =0395437474 ]

A comfort letter may also be used as written assurance by a subsidiary's parent company or bank used to offer 'comfort' to the buyer as to the seller's ability or willingness to perform its obligations. Comfort letters are often used because the seller is unable or unwilling to provide a guarantee on a certain outcome, such as the performance of a security. [Practical Law Company [http://www.practicallaw.com/3-100-9673 Comfort Letter] Retrieved on July 27, 2007]

References

ee also

*Financial audit


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Look at other dictionaries:

  • comfort letter — a letter in business matters written to assure another party of the writer s intentions. It is essentially not supposed to be binding in law but can allow negotiations or commerce to continue. Examples are in relation to contract negotiations and …   Law dictionary

  • Comfort letter — A comfort letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company.[1] The comfort letter can be issued by a CPA declaring no indication of false or misleading information in the financial… …   Wikipedia

  • Comfort Letter — Ein Comfort Letter (auch Letter of Comfort) ist ein aus dem englischen stammender Begriff im Finanz und Wirtschaftswesen. Er bezeichnet eine von einer Gesellschaft abgegebene Erklärung, die einen Sachverhalt, eine Analyse oder eine Prüfung… …   Deutsch Wikipedia

  • 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… …   Financial and business terms

  • Comfort Letter — A letter given to organizations or persons of interest by external auditors regarding statutory audits, statements and reports used in a prospectus. The comfort letter will be attached to the preliminary statements as assurance that it will not… …   Investment dictionary

  • comfort letter — See: letter of comfort …   Accounting dictionary

  • comfort letter — A letter generally requested by securities underwriters to give comfort on the financial information included in an SEC registration statement …   Black's law dictionary

  • comfort letter — A letter generally requested by securities underwriters to give comfort on the financial information included in an SEC registration statement …   Black's law dictionary

  • comfort letter — An alternative term for Representation letter …   Auditor's dictionary

  • comfort letter — an informal statement assuring the financial soundness or backing of a company. * * * …   Universalium

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