Draft Comfort Letter Request

Skill: Draft Comfort Letter Request to Auditor

1. Subject-matter triage

• Treat the request as a comfort-letter exercise tied to a follow-on public offering, not a generic diligence memo.
• First inventory the financial tables, selected financial data, and pro forma information in the offering materials, then map each item to the proper comfort treatment.
• Separate audit-period items, review-period items, stub-period items, and pro forma items before drafting any ask.
• Identify the intended addressees up front and confirm each is a proper recipient under the auditor relationship and the engagement structure.
• If the source set includes a closing date or expected pricing date, anchor the bringdown request to that milestone.

2. Failure modes the skill is correcting

• Baseline requests a single comfort package for all numbers, which blurs the different procedures available for audited, reviewed, and unreviewed periods.
• Baseline omits the change-period methodology, including the correct start and end dates and the required prior-period comparison.
• Baseline ignores the distinction between financial information that can be covered and operational or narrative metrics that ordinarily cannot.
• Baseline fails to isolate pro forma adjustments and the assumptions underlying them.
• Baseline does not test whether each proposed addressee is in privity or otherwise entitled to receive the letter.
• Baseline drafts the issues memo as a generic recap rather than a focused list of offering-document concerns tied to comfort-letter scope.

3. Legal frameworks / domain conventions that apply

• Audited annual periods call for audit-report-based comfort over the audited figures.
• Reviewed interim periods call for review procedures and negative assurance consistent with the review framework.
• Unreviewed stub periods call for agreed-upon procedures, not review-level comfort.
• Change-period comfort should be framed from the end of the last audited or reviewed period through the agreed cutoff date, with comparison to the corresponding prior-year period.
• Pro forma financial information should be requested separately, with arithmetic verification and consistency with stated assumptions.
• Non-financial operating metrics, bookings, backlog, or other business KPIs are often outside standard auditor comfort and should not be requested as if they were audited amounts.
• Bringdown comfort is typically requested for the closing delivery date and updated cutoff, not left open-ended.
• Privity and addressee limits matter; if a party is not a proper recipient, the request should flag the need for reliance or reissuance rather than assume coverage.
• The request should track the governing comfort-letter practice used in capital markets offerings and use conventional auditor terminology throughout.

4. Analytical scaffolds

• Enumerate each financial data item in the offering materials before drafting, then classify it by period type and comfort level.
• For each audited item, request the appropriate audit-based comfort in conventional form.
• For each reviewed item, request negative assurance and any related inquiries consistent with the review period.
• For each stub-period item, request agreed-upon procedures tied to the identified cutoff.
• For each pro forma item, request arithmetic checks and confirmation that the adjustment is derived from the stated transaction assumptions.
• For each non-financial or potentially out-of-scope metric, decide whether to exclude it from the request or flag it for separate handling.
• State the exact change period and the anticipated bringdown date in the request body, not only in a cover note.
• List every proposed addressee and address privity concerns expressly.
• In the issues memo, give each concern a clear severity level, explain why it matters, and end with concrete next steps tied to the offering timeline.

5. Vertical / structural / temporal relationships

• Structure the request by financial category, then by period, then by procedure, so the auditor can see the coverage requested without inference.
• Keep the opening scope statement aligned with the closing deliverables so the letter request and issues memo do not describe different universes of information.
• Preserve the temporal sequence: last audited or reviewed period, intervening stub, change period, bringdown date.
• Where multiple periods overlap a single line item, specify which procedure applies to which slice rather than collapsing them.
• If the source documents identify more than one potential addressee, confirm the set explicitly and note any recipient-specific limitation.
• When the offering materials include both historical and pro forma information, treat historical coverage and pro forma verification as separate asks.

6. Output structure conventions

• Produce two deliverables: a formal comfort-letter request to the auditor and a companion issues memorandum.
• Draft the comfort-letter request first and make it self-contained, with clear headings for scope, categories of information, change period, bringdown timing, and addressees.
• Use conventional comfort-letter phrasing; avoid narrative explanation where a direct request will do.
• In the issues memorandum, define a simple ordinal severity scale once at the top and apply it to each issue.
• For each issue, identify the affected disclosure or data category, explain the coverage limitation or inconsistency, and state the practical consequence for the offering process.
• Close the issues memorandum with a Recommended Actions section that assigns each action to a role and ties it to a transaction milestone or deadline.
• Confirm that the comfort-letter request file is the primary deliverable and that the issues memorandum is secondary and responsive to the same source set.
• Ensure both files are substantive, not placeholders, and that the request contains operative language suitable for transmission to the auditor.