Comfort letter
A Comfort Letter (also Letter of Comfort ) is an English term in finance and business . It refers to a declaration made by a company that confirms a fact, an analysis or an examination and thus more or less authenticates it.
Comfort letter from accounting firms
When auditing company quarterly and annual reports , the auditing companies issue an audit certificate or certification, which is usually referred to as a comfort letter due to the Anglo-American environment . In the case of listed stock corporations in particular, this serves to validate the company's information, which is intended to be a reliable source of information for shareholders.
In Germany there are no legal requirements for the creation of Comfort Letters, but the IDW auditing standard 910 "Principles for issuing a Comfort Letter". The SAS 72 standard was introduced in the United States . In business practice, this standard has also been carried over to Europe and thus also to Germany. Overall, the auditing companies confirm with this letter that the figures are correct and valid and thus represent a reliable source of information for a certain period of time.
Due to the costs that arise from the audit and the liability amount that is often linked to the comfort letter, it represents a significant part of the costs of an IPO .
See also
Individual evidence
- ↑ IDW PS 910 "Principles for Issuing a Comfort Letter"
- ↑ Archived copy ( Memento of the original from March 31, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
