Page 636 - Auditing Standards

As of December 15, 2017
one, and that other acceptable methods of allocation might produce significantly different results.

Furthermore, no comments should be made regarding segment information (or the appropriateness of
allocations made to derive segment information) included in financial statements, since the accountants'
report encompasses that information. 34 Appropriate ways of expressing comments on tables, statistics, and
other financial information are shown in examples F, G, and H [paragraph .64].

.60 In comments concerning tables, statistics, and other financial information, the expression "presents
fairly" (or a variation of it) should not be used. That expression, when used by independent accountants,

ordinarily relates to presentations of financial statements and should not be used in commenting on other
types of information. Except with respect to requirements for financial statements and certain Regulation S-K
items discussed in paragraph .57, the question of what constitutes appropriate information for compliance with
the requirements of a particular item of the registration statement form is a matter of legal interpretation

outside the competence of accountants. Consequently, the letter should state that the accountants make no
representations regarding any matter of legal interpretation. Since the accountants will not be in a position to
make any representations about the completeness or adequacy of disclosure or about the adequacy of the

procedures followed, the letter should so state. It should point out, as well, that such procedures would not
necessarily disclose material misstatements or omissions in the information to which the comments relate. An
appropriate manner of expressing the comments is shown in examples F, G, and H [paragraph .64].

Concluding Paragraph

.61 In order to avoid misunderstanding of the purpose and intended use of the comfort letter, it is

desirable that the letter conclude with a paragraph along the following lines:

This letter is solely for the information of the addressees and to assist the underwriters 35 in conducting
and documenting their investigation of the affairs of the company in connection with the offering of the
securities covered by the registration statement, and it is not to be used, circulated, quoted, or otherwise
referred to within or without the underwriting group for any other purpose, including, but not limited to, the

registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the
registration statement or any other document, except that reference may be made to it in the underwriting
agreement or in any list of closing documents pertaining to the offering of the securities covered by the

registration statement.

Disclosure of Subsequently Discovered Matters

.62 Accountants who discover matters that may require mention in the final comfort letter but that are not
mentioned in the draft letter that has been furnished to the underwriter, such as changes, increases, or

decreases in specified items not disclosed in the registration statement (see paragraphs .45 and .49), will

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