Who can issue comfort letter?
Rachel Hernandez Certified Public Accountant
The comfort letter can be issued by a Certified Public Accountant declaring no indication of false or misleading information in the financial statements and that the company’s prospectus follows the prevailing accounting standards. This is sometimes used in connection with an initial public offering.
What is a mortgage comfort letter?
Comfort letters are requests from clients, lenders, mortgage brokers, insurance underwriters, adoption agencies, healthcare or life insurance providers, government agencies, regulators, or other third parties for accountants to verify certain information regarding the client, usually financial in nature.
Why would a bank accept a comfort letter?
It is usually used where the parent company is unable or unwilling to give a guarantee but wishes to give some comfort to the lender in respect of the subsidiary’s ability to perform its obligations.
What is the point of a comfort letter?
A comfort letter assures the recipient of the soundness of an individual or company it is considering doing business with. Such letters may be sent by auditors, accounting firms, or parent companies. A comfort letter does not contain any legally enforceable promises.
How to get a bank comfort letter?
BANK COMFORT LETTER
- Buyer submits their request along with ICPO, FCO, Pro-forma offer, or sales contract of their trade deal.
- First, BWT will perform an analysis of their trade deal between buyer & seller.
- And then, if the request is approved, the buyer needs to sign a service agreement.
When do I need a CPA comfort letter?
CPAs are regularly asked to provide a loan broker, lender or other third party with a comfort letter or verification letter on behalf of their clients. More and more types of information are being requested to be verified by various agencies, lenders, health insurance providers, etc.
Can a CPA write a letter to a third party?
Most lenders will simply ask the CPA to write a letter indicating that the prospective borrower is self-employed or is employed in a certain profession. Others may attempt to shift the burden of responsibility for due diligence onto the borrower’s CPA and provide a script of what they want the letter to say (see Exhibit 1, below).
How to get a comfort letter from a lender?
To guide you in the right direction, here are some resources and articles on the subject. Financial Reporting Center’s resources including a Technical Practice Aid relating to lender comfort letters.
Do you need a letter from a CPA to get a loan?
Most lenders will simply ask the CPA to write a letter indicating that the prospective borrower is self-employed or is employed in a certain profession.
