Negative Assurance

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS '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. Positive Feedback

    A self-perpetuating pattern of investment behavior. The herd ...
  2. Negative Confirmation

    A request by an auditor sent to a sample of a company's customers ...
  3. Certified Internal Auditor - CIA

    A certification offered to accountants who conduct internal audits. ...
  4. Forensic Audit

    An examination and evaluation of a firm's or individual's financial ...
  5. Generally Accepted Auditing Standards ...

    A set of systematic guidelines used by auditors when conducting ...
  6. Independent Auditor

    A certified public accountant who examines the financial records ...
Related Articles
  1. Markets

    Material Adverse Effect A Warning Sign For Stocks

    Learn what this phrase means and how to spot it in a company's financial statements.
  2. Investing Basics

    The Importance Of Corporate Transparency

    Clear and honest financial statements not only reflect value, they also help ensure it.
  3. Fundamental Analysis

    Financial Footnotes: Start Reading The Fine Print

    Find out what could be hidden in this often-overlooked part of the financial statements.
  4. Retirement

    Common Clues Of Financial Statement Manipulation

    Search for the "bloody" fingerprints in accounting crimes.
  5. Options & Futures

    An Investor's Checklist To Financial Footnotes

    Footnotes to the financial statements contain very important information, but reading them takes skill.
  6. Investing

    What's a Run Rate?

    Run rate is a term used to denote annualized earnings extrapolated from a shorter time frame. Management uses the run rate to estimate future revenues.
  7. Professionals

    Financial Accounting

    Financial accounting is the process of gathering, recording, summarizing and reporting financial data relating to a business. The ultimate goal is to accurately report the financial picture and ...
  8. Investing

    What are Direct Costs?

    Direct costs for finished goods refer to the items and services directly used in production. Other costs such as rent and insurance for the production site are indirect costs. These costs may ...
  9. Investing

    What is Contingent Liability?

    A contingent liability is an amount that might have to be paid in the future, but there are still unresolved matters that make it only a possibility. Lawsuits and the threat of lawsuits are the ...
  10. Investing

    What's Accrued Interest?

    Accrued interest has two meanings. In accounting, it is interest that has been earned, but the time for payment has not yet occurred.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center