Tell the lender to pound sand...

Here's a thread on it from a while ago:

https://proconnect.intuit.com/community/proseries-discussions/discussion/how-do-other-tax-preparers-...

First of all, if you're not a CPA, you can't audit a financial statement.  If you are a CPA, then you have to follow the strict auditing rules of the AICPA.  Here's a good concise AICPA position paper on the subject:

https://www.aicpa.org/content/dam/aicpa/interestareas/frc/downloadabledocuments/third-party-verifica...

So basically the lender doesn't get what they want but they get a piece of paper to stick in the file and that's usually enough to keep the ball rolling.

I haven't seen one in a while, sorry to see these requests rearing their ugly head again.  AFAIK the 2014 language is still relevant and isn't exactly CPA specific (but read through it and see if something needs to be tweaked.)

Rick

Here are some sample disclosure letters.  The "bank" template is on PDF page 7:

https://www.calt.iastate.edu/files/files-page/Sample%20Client%20Ltrs.%20%26%20Disclosure%20Consents....

I doubt seriously that the underwriter has a friggin' clue what an 'audited' financial statement even IS !

The letter I have is from the AICPA (I've modified it a bit over the years...); it basically says "read the damned tax return & form your OWN opinion of the borrower's credit worthiness" but in a lot more words.

I've had push back before (back when these requests were fast/furious) but I've never had a client lose a loan because of the wording on the letter.

They want:

1) a piece of paper for their files

2) someone ELSE on the potential hook in case of default.  

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@abctax55 wrote:

I doubt seriously that the underwriter has a friggin' clue what an 'audited' financial statement even IS !

 

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It probably isn't the underwriting asking for it.  It is the 'front man' that gives the information to the underwriter.  Some of them try to come up with as much as possible to give to the underwriter so they don't reject it.

I've written letters that basically says (1) the client keeps their own unaudited books (2) that I've prepared their tax return with the information they provided me and (3) I have no reason to believe the information they provided me was incorrect.  That has always satisfied them in the past.  I try to intentionally phrase it in a repetitive way to try to convey to the mortgage guy that he is an idiot.

Thank you.  I have some good information to go back to the client with to explain why I am not going to provide the requested information.

KMACK

Thank you.

KMACK

Thank you.