United States

Letters for underwriters and certain other requesting parties


As a result of the AICPA Auditing Standards Board's (ASB) Clarity Project, Statement on Auditing Standards (SAS) No. 122, Statements on Auditing Standards: Clarification and Recodification, was issued in October 2011. SAS No. 122 section 920, "Letters for Underwriters and Certain Other Requesting Parties," was intended to redraft AU section 634 of the same title for clarity but not change practice in this area. However, the ASB became aware of practice issues as a result of implementing AU-C section 920 and, accordingly, recently issued amendments to address those issues and avoid unintended changes to previous practice. The ASB also issued additional amendments to further clarify AU-C section 920. The amendments include the following, among others:

  • Clarifying that the requirement for the auditor to read the comfort letter issued by component auditors whose report is included in the securities offering applies to each component auditor, not only those comfort letters related to significant components
  • Clarifying that if the auditor states in the comfort letter that the auditor has issued a review report on the unaudited interim financial information, the auditor should attach the review report to the letter
  • Adding examples of comfort letters providing negative assurance on pro forma financial information as to compliance with
    • The applicable accounting requirements of Rule 11-02 of Regulations S-X
    • Pro forma bases as described in the pro forma financial information

SAS 129, Amendment to Statement on Auditing Standards No. 122 Section 920, "Letters for Underwriters and Certain Other Requesting Parties", as Amended, is effective for comfort letters issued on or after December 15, 2014. Early implementation is encouraged.