Comfort Letter (M&A Glossary)

Summary

A letter by a company’s independent accountant confirming to the recipient that the company’s financial statements remain accurate and no material changes have occurred since the preparation thereof. This is typically sought by a bidder for a public company to ensure that target had no material adverse changes after the last audited financials’ issuance. A cold comfort letter merely states that the accountant has no knowledge of anything that would make the last financial statements materially inaccurate – a far lower standard.