What Does an Underwriter Typically Require from an Accountant Which

question 28

Multiple Choice

What does an underwriter typically require from an accountant which indicates that the company has fulfilled all the accounting requirements in the registration process?

• A)A comment letter
• B)An audit opinion
• C)A "red herring" prospectus
• D)A comfort letter

---

Definitions:

Noncash Assets

Assets owned by a business that cannot be easily converted to cash, such as property, plant, and equipment.

Loss on Realization

A financial loss recognized when liquidating assets yields less value than initially recorded on the books.

Income Ratio

A financial metric comparing some form of an entity's income to another, providing insights into financial stability, profitability, or performance.

Capital Account Balances

The amounts recorded in the equity section of the balance sheet, representing owners' contributions and retained earnings in a business.