comfort letter

comfort letter definition - finance
A letter from an accounting firm given to a company before the company goes public. The letter states that the accountants are comfortable with the unaudited financial data in the companyÂ’s prospectus and that the company follows generally accepted accounting principles. The letter also states that no material changes have occurred since the financial reports were prepared. Investors use the comfort letter to assure themselves that the companyÂ’s financial statements are accurate.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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