Negative ConfirmationsNegative Confirmations

Negative Confirmations

1. Negative confirmations provide less persuasive audit evidence than positive confirmations. Accordingly, the auditor shall not use negative confirmation requests as the sole substantive audit procedure to address an assessed risk of material misstatement at the assertion level unless all of the following are present: (Ref: Para. A23)
   1. The auditor has assessed the risk of material misstatement as low and has obtained sufficient appropriate audit evidence regarding the operating effectiveness of controls relevant to the assertion;
   2. The population of items subject to negative confirmation procedures comprises a large number of small, homogeneous, account balances, transactions or conditions;
   3. A very low exception rate is expected; and
   4. The auditor is not aware of circumstances or conditions that would cause recipients of negative confirmation requests to disregard such requests.