In such a letter, the accountants should not provide negative assurance on the financial statements as a whole, or on any of the specified elements, accounts, or items thereof
Unlike positive assurance, auditors are not required to obtain sufficient appropriate evidence to form a basis of opinion
In this case, they only need to review if there are any problems with financial statements or subject matters
This is why negative assurance is usually used in a review engagement
Positive assurance identifies proof of facts during an audit
By documenting proof, an auditor can affirm no fraud has been committed
In the absence of positive assurance, negative assurance may be used
What Does Assurance Mean in an Audit?
Due to the lower assurance required, auditors use a negatively worded conclusion
Auditors provide both positive and negative assurance as a part of their audit reports
Positive assurance relates to reasonable assurance engagements
On the other hand, negative assurance comes with limited assurance engagements
Accounting assurance technique
Negative assurance within accounting ethics
Is a method used by the Certified Public Accountant to assure various parties
That financial data under review by them is reasonable.Negative assurance tells the data user that nothing has come to the CPA's attention of an adverse nature or character regarding the financial data reviewed.
Positive assurance within accounting ethics
Is the affirmation that a Certified Public Accountant believes a something to be true or correct.Issuing an opinion that the financial statements are presented fairly in conformity with U.S.GAAP is an example of a CPA providing positive assurance.
