In connection with a public offering of first-mortgage bonds by Guizzetti Corporation, the bond underwriter has asked Guizzetti's CPAs to furnish it with a comfort letter giving as much assurance as possible on Guizzetti's unaudited financial statements for the three months ended March 31. The CPAs had expressed an unqualified opinion on Guizzetti's financial state ments for the year ended December 31, the preceding year; they also performed a review of Guizzetti's 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.
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.