What is Comfort letter?
In short
A comfort letter is a letter from an entity's auditor to the underwriters of a securities offering, covering matters such as the auditor's independence and procedures performed on financial information in the registration statement.
Key takeaways
- It can give negative assurance on unaudited interim financial information the auditor has reviewed.
- It helps underwriters show they performed a reasonable investigation.
- It is addressed to the underwriters and the entity, not to the public.
Where it's tested
AUD: Attestation & System and Organization Controls (SOC) Engagements — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A user auditor wants to rely on controls at a service organization for the entire audit period. Which report provides appropriate evidence?