In connection with a public offering of first-mortgage bonds by Guizzetti Corporation, the bond underwriter has asked Guizzettis CPAs to furnish it with a comfort letter giving as much assurance as possible on Guizzettis unaudited financial statements for the three months ended March 31. The CPAs had expressed an unqualified opinion on Guizzettis financial statements for the year ended December 31, the preceding year; they also performed a review of Guizzettis financial statements for the three months ended March 31. Nothing has come to their attention that would indicate that the March 31 statements are not properly presented.

Required:

a. Explain what can be stated about the unaudited financial statements in the letter.

b. Discuss other matters that are typically included in comfort letters.