negative assurance

Definition

When auditors state they found nothing wrong in their limited review rather than affirmatively stating everything is correct. It's the professional equivalent of 'I didn't see any problems' rather than 'everything is definitely fine.'

Example Usage

The review engagement provides only negative assurance, meaning the accountants aren't saying the financials are right, just that they didn't notice them being wrong.

Origin

Auditing terminology distinguishing between review and audit levels of assurance

Fun Fact

Negative assurance is cheaper than a full audit but provides much less comfort—you get what you pay for in professional skepticism.

Source: Auditing and attestation standards terminology

Related Terms

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matching principle

The accounting concept that expenses should be recorded in the same period as the revenues they helped generate, because timing matters. It's why you can't expense the entire marketing budget in January even though that's when you paid for it.

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When one party acquires a controlling stake in a company by purchasing enough shares to tell everyone else to pack their desk plants. It's the corporate equivalent of buying out your roommate's lease, except with more lawyers, bigger numbers, and significantly less drama about who gets the couch. Can be friendly (management buyout) or hostile (surprise, you work for someone else now).

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negative goodwill

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💰 Finance / Accounting

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