Negative assurance is a type of assurance that an auditor provides in certain situations. It is the confirmation that an auditor gives when he or she cannot determine the accuracy of a particular statement or fact through positive assurance. While positive assurance would be the proof of the accuracy of a statement or fact, negative assurance is not an affirmation that it is true or correct, but rather a confirmation that the auditor was not able to find any evidence of fraud or cheating.

Negative assurance is most commonly used when the information being audited is of a subjective nature and the auditor has not been able to verify the accuracy of the reported facts. For example, a company’s compliance with certain standards may be subject to the auditor’s opinion and judgment. Since the auditor cannot prove that the statement is accurate, they can only provide a negative assurance.

In order to provide negative assurance, the auditor must conduct a thorough examination of the company’s records, accounts and documents. The auditor must also verify that the company’s internal controls are in place and functioning properly. It is necessary for the auditor to complete the examination process and make sure that there is no evidence of illegal activity. If any evidence of fraud or wrongdoing is uncovered during the audit, the auditor must report this to the proper authorities.

Negative assurance is a valuable feature of the audit process because it helps ensure that the risks associated with financial statements and presentations are minimized. It helps to protect the interests of stakeholders by confirming that the information shared with them is accurate and reliable. Negative assurance can also help a company establish its credibility in the market by demonstrating that it is committed to accountability and transparency.

Negative assurance is not a guarantee that the information shared is true or correct. It is merely the auditor's assurance that no fraud or violations have been found during the audit process. Since the auditor is unable to provide absolute proof, the risk associated with the information remains with the company. It is important that companies take the necessary steps to ensure that their financial statements and presentations are accurate to minimize potential risks.