As CPAs, we are sometimes asked to provide assurances regarding a client's creditworthiness or financial strength, often with little or no time to respond in a manner that complies with professional standards.
It is extremely important to understand what information CPAs can and cannot provide. AICPA Professional Standards prohibit CPAs from providing 1) any form of assurance regarding matters of solvency, and 2) assurance regarding financial position when we have not performed the requisite scope of services.
Because the risk to our professional license is significant, we will not respond directly to a third-party request.
We will handle third-party requests as follows:
We will obtain written client consent before providing any response
We will not sign any pre-printed form
We will only respond in writing and our response will clearly state that no assurance is given
We will only respond with facts about services that we have performed
We will not speculate on future events and we will not make conclusions not supported by the services we have performed
We will not provide any form of assurance regarding matters of solvency
By understanding the limitations enumerated above, expectations will be clearer when a third-party requests a 'Comfort Letter.'