PCAOB Seeks Stakeholder Feedback on Proposal to Update Rules Related to Auditor Comfort Letters

The Public Company Accounting Oversight Board (PCAOB) issued for public comment proposed targeted amendments to AS 6101, Letters for Underwriters and Certain Other Requesting Parties. The proposed targeted amendments would update outdated provisions of AS 6101, notably by removing the day-count convention that can prevent auditors from providing negative assurance as to subsequent changes in selected financial statement items in “comfort letters.” Comfort letters are an important source of information for underwriters to consider when companies raise capital.  

The deadline for public comment on the proposal is January 4, 2027. 
 
“This proposal is yet another step in the PCAOB’s efforts to improve our standards,” said Chairman Demetrios (Jim) Logothetis. “Updating this outdated provision better aligns an auditor’s ability to keep investors informed about company performance with current reporting and filing deadlines. This proposal would preserve investor protection, support efficient capital formation, and make clear that the decision to provide negative assurance remains solely a matter of the auditor’s professional judgment. We look forward to receiving comments from stakeholders across the audit and financial reporting ecosystems.” 

Background: The Role of Comfort Letters in Capital Formation 

When a public company seeks to raise capital, an underwriter (usually an investment bank) involved in the fundraising may ask an auditor to provide a comfort letter concerning the company’s unaudited condensed interim financials and other information.  

In a comfort letter, an auditor’s comments typically relate to changes, increases, or decreases in specified financial statement items during a period subsequent to the date and period of the latest financial statements included in the registration statement.  

Currently under AS 6101, the auditor may provide negative assurance (meaning the auditor finds no evidence to dispute certain facts) as to subsequent changes in specified financial statement items. However, the standard provides the auditor may provide negative assurance as to subsequent changes in specified financial statement items as of a date that is less than 135 days from the end of the most recent period for which financial statements were audited or reviewed. The current day-count convention assumes a quarterly filing cadence.  

Why the Board Is Issuing This Proposal 

Under the current requirements within AS 6101, which has not been substantially amended since its adoption as an interim standard in 2003, an auditor may be unable to provide negative assurance as to subsequent changes in select financial statement items in a comfort letter solely because more than 135 days have passed since the company’s most recent audit or review – even when the company remains current with all applicable U.S. Securities and Exchange Commission (SEC) filing requirements.  

For example, for a calendar-year filer, the auditor is unable to provide negative assurance between a date that is 135 days after the third quarter reporting date (generally, September 30) and the annual report filing deadlines (which is generally due no earlier than March 1 and up to March 31). As a result, issuers could be unnecessarily constrained in accessing capital markets if underwriters are unwilling to engage in offerings after the 135-day period without an auditor’s ability to provide negative assurance as to subsequent changes. Such obstacles can impede capital formation, with no clear benefit to investors.  

If adopted, this proposal would replace the 135-day convention with an issuer’s reporting obligations, regardless of potential future changes to those obligations.  

Comments Due January 4, 2027 

Comments, which should be received by the Board by January 4, 2027, can be provided via the following methods:  

• Email: [email protected]  

• Postal mail: Office of the Secretary, PCAOB, 1666 K Street, NW, Washington, DC 20006-2803 

All comments should reference the Board release number, PCAOB No. 2026-058, in the subject or reference line.