An auditor's comfort letter provides underwriters with
certain assurances with respect to the financial information
included in an offering document. One of the first steps of
underwriters' counsel in the comfort letter process is to
"circle-up" the financial information in the offering
document, including certain information incorporated by reference.
Underwriters' counsel will circle the numbers in the offering
document on which they want comfort (i.e. the
"circle-up"), which the auditors then compare against the
issuer's accounting records.
Once the circle-up is complete, the auditors will then provide
varying levels of comfort for these circled items in a process
known as "tick and tie". Auditors will assign a certain
symbol or letter (a "tick") to each procedure they
perform to confirm the accuracy of the financial information. Each
circled item is then assigned (or "tied" back to) a
certain tick based on the procedure the auditors performed for that
item.
