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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
Letter
Requests
From
Lenders,
Mortgage Brokers," The CPA Letter,
February 2007, AICPA.
AICPA
Information
Technology
Center: Federal, State and Other
Professional Regulations. www.aicpa.org/
InterestAreas/InformationTechnology.
CNA,
Accountants
Professional
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.
This information is produced and pre-
sented by CNA, which is solely respon-
sible for its content.
The purpose of this article is to provide
information, rather than advice or opin-
ion. It is accurate to the best of the
author's knowledge as of the date of
the article. Accordingly, this article
should not be viewed as a substitute
for the guidance and recommendations
of a retained professional. In addition,
CNA does not endorse any coverages,
systems, processes, or protocols
addressed herein unless they are pro-
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Any references to non-CNA websites are
provided solely for convenience, and
CNA disclaims any responsibility with
respect to such websites.
To the extent this article contains any
examples, please note that they are for
illustrative purposes only and any simi-
larity to actual individuals, entities,
places, or situations is unintentional and
purely coincidental. In addition, any
examples, including the sample letter,
are not intended to establish any stan-
dards of care, to serve as legal advice
appropriate for any particular factual sit-
uations, or to provide an acknowledge-
ment that any given factual situation is
covered under any CNA insurance poli-
cy. Please remember that only the rele-
vant insurance policy can provide the
actual terms, coverages, amounts, con-
ditions, and exclusions for an insured. All
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available in all states and may be sub-
ject to change without notice.
IRS Circular 230 Notice: The discussion
of U.S. federal tax law and references to
any resources in this material are not
intended to: (a) be used or relied upon
by any taxpayer for the purpose of
avoiding any federal tax penalties; (b)
promote, market, or recommend any
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be considered except in consultation
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circumstances.
Continental Casualty Company, one of
the CNA insurance companies, is the
underwriter of the AICPA Professional
Liability Insurance Program. Copyright
2011 CNA. All rights reserved.
Reprinted with permission.
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Third Party Verification Letters
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