We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Comfort Letter?

Malcolm Tatum
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Comfort letters are informal letters that are sometimes prepared by accounting firms. The subject matter of the letter often centers on the results of a review of financial data associated with a given company. While not considered a binding document, the letter will provide the general opinion of the accountant regarding the current financial status of the company.

It is important to note that the review conducted for the preparation of a comfort letter should not be considered to be a thorough or in depth exploration into the financial workings of the corporation in question. More commonly, the review will be a cursory one that is simply to make sure that the accounting practices currently used by the company are in harmony with any applicable government regulations. As a secondary concern, the review may also involved making sure that the documentation is in order for the company to issue a public offering.

When an accounting firm issues a comfort letter, it is usually at the request of the company that is planning some sort of offering or otherwise considering some sort of business venture that will involve another company. Unlike a formal audit that is designed to go over each aspect of the accounting process in detail, the review for the comfort letter simply makes sure the books are in order and that the entries are logical and consistent. The text of the letter may vary somewhat, but the content normally tends to affirm that the accounting for the corporation appears to be in order. In some instances, the comfort letter may inform the addressee that the review uncovered issues that need to addressed and corrected before proceeding with a public offering or other partnership plans.

At not time should a comfort letter be considered a legal binding document that ensures the financial stability of the corporation. However, if the review associated with the preparation of the letter indicates some irregularities in the accounting process, ordering a full audit may be an excellent idea.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By anon17883 — On Sep 09, 2008

if a bank is offering a letter of comfort for a customer, should they indicate their willingness to support the customer in keeping with the customers financial track records ?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.