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Third Party Verification Letters
Increasingly, CPAs are receiving requests from clients, lenders, loan brokers, health insurance providers and various other agencies to confirm client information. In most cases CPAs are asked to sign a confirmation letter containing specific language, a verification statement or a certification form. The most common type of requests are associated with mortgage loan applications of tax return preparation clients who are self-employed. By obtaining a comfort letter, lenders or brokers attempt to shift responsibility for confirming the accuracy of the information to the borrower's CPA. As a result the lender may be in a better position to sue the firm to recover the loan losses, alleging a negligent misrepresentation by the accountant which was relied upon by the lender. This could be used in some instances to establish the lender's standing to sue the accountant where it may not otherwise exist. In light of this, we will not provide such letters.