Negative assurance audit
It also known as limited assurance audit, is a type of assurance engagement where the auditor provides a negative assurance opinion on a specific aspect of an entity’s financial statements or other information. Unlike a positive assurance opinion where the auditor provides a statement of assurance, in a negative assurance audit, the auditor’s conclusion is expressed in the negative form.
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In a negative assurance audit, the auditor performs limited procedures and gathers sufficient appropriate evidence to obtain a reasonable basis for expressing negative assurance. The procedures may include inquiry, analytical procedures, and review of documentation. The typical conclusion provided by the auditor express as follows: “Based on our examination, we have not identified any information that would lead us to believe that the [specific aspect] do not fairly present, in all significant aspects, in accordance with the relevant financial reporting framework.”
Negative assurance audits often conduct for specific components or elements of financial statements. Such as management’s discussion and analysis (MD&A), selected disclosures, or compliance with specific regulations or agreements. They provide a lower level of assurance compared to a full financial statement audit, where the auditor provides a positive assurance opinion on the financial statements as a whole.
It’s important to note that Its engagements require appropriate documentation of the procedures performed, the evidence obtained, and the conclusions reached. This contributes to promoting transparency and accountability throughout the auditing procedure.
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