M7 Letters for Underwriters

Question 1

What is a comfort letter?

Answer 1

letter from the cpa to the underwriter before the registration of the clients securities

Question 2

When/why is a underwriter used?

Answer 2

For the underwriters due diligence

Question 3

Is the comfort letter for restricted use?

Answer 3

Yes and must have a stmt stating that

Question 4

What are the auditors responsibilities for a comfort letter?

Answer 4

• obtain an understanding of the specific matter addressed in the comfort letter
• describe the procedures
• communicate that the auditor cannot apply assurance