Comfort Letter

Dear Investors,

This company is fine. We've looked at the books and everything is A-Okay.

Love,

A Bunch of Auditors

That note characterizes the underlying gist of a comfort letter. It's a document put together by an auditor that attests that a company is financially sound.

There's a similar form of assurance known as a "verification letter." This document has the same general function as a comfort letter, but applies to a broader range of situations. In these cases, an accountant might be asked to weigh in on an individual's financial soundness, in situations like a loan negotiation or a child adoption proceeding. It can also come up in relation to employee medical insurance. These verification letters are typically issued by the individual's personal accountant.

And the whole thing is very different from a Southern Comfort letter, which carries a hangover...but that's a different story.