What is an Accountant’s Letter?
An ‘Accountant’s Letter’ is a document prepared by an accountant at the request of their client for a bank, lender, or another party for the purposes of approving a loan, lease or rental agreement for a client. The actual format of the information requested may vary widely but, in essence, the lender’s request is for the accountant to provide or confirm information about a client’s historical, current or future financial affairs. Accountant’s letters are also commonly referred to as “Accountant’s Declarations” or “Capacity to Repay” Certificates.
Depending on the terms of the letter, providing an Accountant’s Letter may shift some or all risk of a credit assessment from the lender to the accountant. This means there are significant risks for the practice, including potential liability, attached to providing these documents.
Some engagements related to financing requested by our clients carry a lower level of risk that we may consider acceptable for the practice. Examples include engagements to assist your client prepare information for their lender, such as financial reports, current business plans or budgets. You as the client must understand that no assurance is being provided on the documents, nor can any reliance be taken by the client or third parties on the information contained in the documents provided.
If you require an accountant’s letter, please discuss your requirements with us first and we will firstly decide if we will accept the engagement and secondly advise you of the appropriate fee if accepted.