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Even after offering this practical solu-
tion, clients may continue to press you
to provide the specific representation
that a lender, broker, or other third party
is seeking. The third party may assert
that the client will not be approved for a
loan or may otherwise fail to meet their
requirements if the CPA does not pro-
vide the requested letter, verification or
certification. When this occurs, remind
the client about the limited nature of the
scope of services provided, and why it is
inconsistent with such representations.
Third parties are responsible for per-
forming their own due diligence rather
than relying on a representation or ver-
ification of information by a CPA. This
is especially true when the requested
representations are outside the scope
of the CPA's engagement and the
requested verification relates to infor-
mation that comes from the client, for
which the CPA has no first hand knowl-
edge. Additionally, while clients desire
the flexibility to obtain credit in the mar-
ketplace, the responsibility for under-
writing a loan and determining the
creditworthiness of the borrower lies
with the lender not the client's CPA.
Additional Resources
"How CPAs Should Handle Comfort
Mortgage Brokers," The CPA Letter,
February 2007, AICPA.
Center: Federal, State and Other
Professional Regulations.
Liability, 333 S. Wabash Ave., 39S,
Chicago, IL 60604.
Updated March 2011 by Accountants
Professional Liability Risk Control, CNA,
333 South Wabash Ave., 39S, Chicago,
IL 60604.
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Liability Insurance Program. Copyright
2011 CNA. All rights reserved.
Reprinted with permission.
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Third Party Verification Letters
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