Validity of Letter of Support
My audit client has gone into liquidation despite the parent company (whom I do not audit) providing me with a continuing letter of support as part of my audit (so signed off as a going concern).
Despite the parent company pledging their continuing support for 12 months following the approval of the last set of accounts, my client has gone into liquidation just 3 months later (obviously the parent has pulled the plug).
Does anyone know if I have any scope for going after the parent company for collection of my audit fees? The letter does specifically say that "we shall arrange for sufficient funds to be made available to enable XXXX Ltd to continue trading and meet its liabilities as and when they fall due".
I have spoken to some people who have questioned the validity of a letter of support seeing as it is just a signature on a piece of paper.