What is the difference between Negative assurance, Positive assurance, Negative opinion and Negative report?

Difference between Negative assurance and Positive assurance

Many students get confuse in these things and mostly it is because books usually use such terminologies which prevail in the business world which are most of the time shortened up and thus sometimes lose their meanings.

Lets start with Positive and Negative assurance. Many students think that these are two types of assurances engagements but the reality is different. As these are not types in itself rather just the types of expressions depending upon the type of engagements. Read on to understand more.

Technically we have Reasonable assurance engagements and Limited assurance engagements as two types of assurance engagements and under both types of engagements we express opinion.

In Reasonable assurance engagements the opinion is given in positive form of expression. Hence the widespread use of positive assurance where the correct use is “positive expression of opinion under assurance” or “assurance expressed in positive form”

In Limited assurance engagements the opinion is provided in negative form of expression. Hence the widespread use of negative assurance where the correct use is “negative expression of opinion under assurance” or “assurance expressed in negative form”

Now let’s understand the difference between “positive assurance” and “negative assurance”. With an example.

Mr. A went to buy a car with his friend. His friend is experienced and know about cars and can help him and his opinion will help Mr. A in choosing a better car for his money. They checked two different cars namely “Unity” “Faith”

Mr. A’s friend expressed the following opinions about the two cars:

  • Unity – “I have used this car and believe me I still have no problems with this. Even this car I have checked extensively and found no problems in it. Its a GOOD car
  • Faith – “One of my relatives have this car so I know little less about it. As far as this piece is concerned I have checked it to the extent I understand it in few minutes. Its NOT BAD

Apparently both opinions look the same but they are not. Let’s analyze them deeply.

For Unity Mr. A’s friend said It is a GOOD car which means that it is definitely not bad and also he based his opinion after checking it thoroughly. So its a clear expression of his state of mind and give much higher assurance about the car that it is good.

For Faith Mr. A’s friend said that It is NOT BAD which means that is not bad but at the same time it does NOT mean that it is good also. Also the expression of opinion has changed and as it includes the word “NOT” so we say that friend has expressed his opinion in negative form of expression. And because of lesser experience and limited time available for examination he gave an opinion which is providing lesser assurance as compared to the assurance given for Unity.

So we reckon that saying something is GOOD is not equal to saying NOT BAD in auditing. And also forms of expressions matter as they provide different levels of assurance.

Difference between Negative assurance, Negative opinion and Negative report

We have already discussed what is meant by negative assurance where basically it represents the negative form of expression of practitioner’s opinion under limited assurance engagements.

Negative opinion and Negative report are less used words and again are just another coined up terminologies. As far as I know Negative opinion means Adverse opinion and Negative report is a report carrying Adverse opinion.

Meanings can be different from what I have described as these words are not used as such in the standards and thus have not been clearly defined and also standards don’t use more than one term to describe the same thing as it create confusions. For example standards will use the term adverse opinion and not negative opinion.

But I recommend that students should use the vocabulary given in standards as such terminologies can pose problems in understanding and avoid such unnecessary terms.


  1. this article lost me on
    ” They checked three different cars namely “Unity” “Faith””

    • Corrected. Thanks 🙂

  2. I loved the example about the cars that you used. it cleared it up for me, thank you!


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