Accountant's Letter

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Dictionary Says

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".
Investopedia Says

Investopedia explains '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 Definitions

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  • Adverse Opinion

    A professional opinion made by an auditor indicating that a company's financial statements are misrepresented, misstated, and do not accurately reflect its financial performance and ...
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  • Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by ...
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    • Opinion Shopping

      A company's action of searching for an auditor who will give a positive opinion of the company's accounting practices (even though they might not deserve it).
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    • Independent Auditor

      An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report.
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    • Going Concern

      A term for a company that has the resources needed in order to continue to operate indefinitely. If a company is not a going concern, it means the company has gone bankrupt.Also known as ...
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