Statement on auditing standards, 038

              Statement on
Auditing Standards
Issued by the Auditing Standards Executive Committee
AICPA American Institute of
Certified Public Accountants
April 1981
38
Letters for Underwriters
1. The services of independent certified public accountants include
examination of financial statements and schedules contained in regis­tration
statements filed with the Securities and Exchange Commission
( the SEC) under the Securities Act of 1933 ( the Act). In connection
with this type of service, accountants often are called upon to confer
with clients, underwriters, and their respective counsel concerning
the accounting and auditing requirements of the Act and of the SEC,
as well as to perform other services. One of these other services is the
issuance of letters for underwriters, commonly called comfort letters,
which are generally concerned with the subjects described in para­graph
6.
2. Much of the uncertainty and consequent risk of misunderstand­ing
with regard to the nature and scope of comfort letters has arisen
from a lack of recognition of the necessarily limited nature of the
comments that accountants can properly make with respect to finan­cial
information, in a registration statement, that has not been exam­ined
in conformity with generally accepted auditing standards and
accordingly is not covered by their opinion. Underwriters, in request­ing
comfort letters, are generally seeking assistance on matters of im­portance
to them. They wish to perform a " reasonable investigation"
Note: This Statement supersedes Statement on Auditing Standards No. 1, sec­tion
630, " Letters for Underwriters." The changes are in response to revisions
of reporting requirements under regulations of the Securities and Exchange
Commission and changes in professional standards relating primarily to reviews
of interim financial information.
Copyright © 1981 by the
American Institute of Certified Public Accountants, Inc.
1211 Avenue of the Americas, New York, N. Y. 10036
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