We are frequently approached with questions about the accountant’s letter in loan applications.
In the course of our professional practice, requests for accountant’s letters to support loan applications are commonplace. It’s crucial for our clients to be aware of both the capabilities and limitations of these letters. According to the Accountant’s Letter Toolkit, which adheres to the high standards of Chartered Accountants ANZ, we want to make the following clear:
**What we cannot confirm:**
– Future earnings or expenses
– Solvency or financial health projections
– Guarantee of loan approval based on our letters
**What we can confirm:**
– Gross taxable income
– Principal sources of income
– Number of years tax returns have been lodged
– Audit status of accounts
This information is vital for lending institutions to make informed decisions without encroaching upon the stringent boundaries of our professional capabilities. In essence, while we cannot facilitate loan approvals through accountant’s letters alone, especially when a borrower’s eligibility is doubtful, we stand ready to support our clients with accurate, compliant, and professionally prepared financial documentation.
If your lending institution continues to request an accountant’s letter, please provide them with the “Accountants Letter Toolkit” jointly issued by the three leading accounting professional bodies in Australia.