What is 'Negative Assurance'

A representation that particular facts are believed to be accurate since no contrary evidence has been found. Negative assurance is normally used by auditors in situations where it may not be possible to positively confirm the accuracy of financial reports. Since fully auditing a public company in accordance with generally accepted accounting standards is an extremely large task, a positive assurance is normally issued only when legally required.

BREAKING DOWN 'Negative Assurance'

A positive assurance of accuracy is considered stronger, and is required for certain audited financial reports released by public companies. Negative assurance is most often issued when an accountant reviews certified financial statements prepared by another accountant. In this case, since another accountant has already certified the accuracy of the statements, a negative assurance is often seen as sufficient to confirm that the statements are free or material misstatements.

RELATED TERMS
  1. Certified Financial Statement

    A financial statement, such as an income statement, cash flow ...
  2. Audit

    An unbiased examination and evaluation of the financial statements ...
  3. Assurance Services

    A type of professional service usually provided by CPAs. Assurance ...
  4. Assurance

    Coverage of an event that is certain to happen. Assurance is ...
  5. Positive Confirmation

    An auditing inquiry that requires the customer to respond to ...
  6. Audit Cycle

    The accounting process that auditors employ in the review of ...
Related Articles
  1. Financial Advisor

    Examining A Career As An Auditor

    Stricter government regulations have put auditing professionals in demand.
  2. Taxes

    What Does an Auditor Do?

    An auditor ensures that organizations maintain accurate and honest financial records.
  3. Personal Finance

    Financial Auditor: Job Description & Average Salary

    Discover what it means to hold a financial auditor position, including typical job duties, education and training, required skills and expected salary.
  4. Personal Finance

    Career Advice: Accounting Vs. Auditing

    Understand the subtle distinctions between accounting and auditing, and learn what each offers a new graduate in terms of salary, job security and daily life.
  5. Taxes

    What's an Audit?

    An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent.
  6. Personal Finance

    Financial Auditor: Career Path & Qualifications

    Learn more about what it takes to become an internal or external financial auditor, and determine whether the profession is right for you.
  7. Managing Wealth

    Internal Auditor: Job Description & Average Salary

    Learn about what the job of internal auditor entails, as well as the median salary, education and certifications required and future career path.
  8. Personal Finance

    Internal Auditor: Career Path & Qualifications

    Find out what kind of work internal auditors do in large organizations, and learn more about how to get started working in the field.
  9. Investing

    An Inside Look At Internal Auditors

    Find out why these number crunchers are part of every chief officer's dream team.
  10. Personal Finance

    A Look At Accounting Careers

    More than just crunching numbers, this career blends detective work with trouble shooting.
RELATED FAQS
  1. What is the difference between a compiled and a certified financial statement?

    All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement ... Read Answer >>
  2. How is inherent risk assessed by an auditor?

    Learn how CPA auditors assess the levels of inherent risk of different audit areas that they use to design the procedures ... Read Answer >>
  3. What are some examples of inherent risk?

    Read about the nature of inherent risk in preparing and executing financial audits, including some common situations that ... Read Answer >>
  4. What are the objectives of financial accounting?

    Learn about the principle objectives of financial accounting, including the furnishing of the financial statements for those ... Read Answer >>
  5. How important are contingent liabilities in an audit?

    Read about the importance of contingent liabilities during an audit, why audits are necessary and how contingent liabilities ... Read Answer >>
  6. What should I do to prepare for an IRS audit?

    Find out how to prepare for an IRS audit, what kinds of audits you might face and what kinds of habits you should develop ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center