Accountant's Letter

DEFINITION of 'Accountant's Letter'

A letter that usually precedes a financial report. An accountant's letter is produced by a company's independent auditors. It summarizes the scope of the accountant's audit and its results in very general terms. The term is frequently used interchangeably with the term "auditor's opinion".

BREAKING DOWN 'Accountant's Letter'

The accountant's letter usually expresses a "clean" opinion, which means the accountant or accounting firm believes the financial statements are accurate and that they fairly present the company's financial condition. A "qualified" opinion indicates deficiencies in the company's procedures or presentation (meaning the financial statements may not be accurate or may not conform to GAAP).

An "adverse" opinion, which indicates that a company's financials are misrepresented, is yet another possibility. The most well known opinion is the "going concern", which means that the accounting firm has doubts about the company's financial health and its ability to remain in business.

RELATED TERMS
  1. Opinion Shopping

    The practice of searching for an outside auditor who will provide ...
  2. Comfort Letter

    A letter given to organizations or persons of interest by external ...
  3. Unqualified Opinion

    An independent auditor's judgment that a company's financial ...
  4. Audit Cycle

    The accounting process that auditors employ in the review of ...
  5. Auditor

    An official whose job it is to carefully check the accuracy of ...
  6. Accountant's Opinion

    A statement signed by an independent accountant outlining his ...
Related Articles
  1. Investing

    Why Companies Welcome an Unqualified Opinion

    An unqualified opinion is an independent auditor’s opinion that a company’s financial statements are fair and accurate.
  2. Investing

    Examining A Career As An Auditor

    Stricter government regulations have put auditing professionals in demand.
  3. Managing Wealth

    Career Advice: Accounting Vs. Auditing

    Understand the subtle distinctions between accounting and auditing, and learn what each offers a new graduate in terms of salary, job security and daily life.
  4. Professionals

    Internal Auditor: Career Path & Qualifications

    Find out what kind of work internal auditors do in large organizations, and learn more about how to get started working in the field.
  5. Markets

    What Does Going Concern Mean?

    Going concern is a concept used in business and accounting to describe the fiscal health of a company.
  6. Investing

    An Inside Look At Internal Auditors

    Find out why these number crunchers are part of every chief officer's dream team.
  7. Investing

    A Day In The Life Of An Accountant

    An analysis of the accountant profession, who becomes an accountant, what they do, where they work, and salary ranges.
  8. Managing Wealth

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
  9. Managing Wealth

    Spotting Companies In Financial Distress

    What are the warning signs that a company is struggling - or worse, sinking - financially? Read on to find out.
  10. Managing Wealth

    Common Interview Questions for Financial Auditors

    Identify questions commonly asked at financial auditor job interviews, and learn to formulate winning responses that give your candidacy a boost.
RELATED FAQS
  1. Can entities other than banks issue letters of credit?

    Obtaining a letter of credit from a non-bank is legally acceptable according to the ICC, but companies tend to prefer to ... Read Answer >>
  2. When are you legally required to get a letter of credit?

    Learn how exporters or importers who deal in international trade use letters of credit to ensure that transactions are safe, ... Read Answer >>
  3. How legally binding is a letter of intent?

    Find out when a letter of intent is binding and when it is not. Understand the roles of drafting language, relationships ... Read Answer >>
  4. What are the different ways I can file my income tax return?

    Learn about the potential consequences of violating the terms of a letter of intent, such as breakup fees, damages and agreement ... Read Answer >>
  5. How important are contingent liabilities in an audit?

    Read about the importance of contingent liabilities during an audit, why audits are necessary and how contingent liabilities ... Read Answer >>
  6. What is a bank's legal liability when issuing a letter of credit?

    Learn the responsibility of banks that issue letters of credit Letters of credits ensure payment on transactions between ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center