An auditor is performing a 'comfort letter' engagement for underwriters. Which of the following is correct regarding the assurance provided?

Answer options:

Positive assurance is provided on the unaudited interim financial information.

Negative assurance is provided on unaudited interim financial information.

The letter is filed with the SEC.

The auditor provides an opinion on the solvency of the entity.

How to approach this question

Comfort Letter = Negative Assurance on Interim/Capsule info. Positive Assurance on Independence/Audited FS compliance.

Full Answer

B.Negative assurance is provided on unaudited interim financial information.✓ Correct

In a comfort letter, the auditor provides negative assurance ('nothing came to our attention') regarding unaudited interim financial information and subsequent changes in specified financial statement items.

Common mistakes

Thinking auditors give solvency opinions (prohibited).

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