Negative assurance is a statement by a CPA that no adverse issues have been found regarding the accuracy of a client's financial statements. This assurance is most commonly given under the following circumstances:
When the CPA is asked to render an opinion regarding financial statements that have already received an audit opinion, usually in an earlier period.
When the CPA is asked to render an opinion regarding financial information being relied upon as part of the issuance of securities.
This type of assurance is only permissible when the CPA directly gathers audit evidence, rather than relying upon evidence gathered by a third party. The audit procedures used as the basis for a negative assurance statement are not as robust as what would be required for the more common positive assurance statement.