(d) Negative assurance
Negative assurance means that nothing has come to the attention of an auditor which indicates that the cash flow forecast
contains any material errors. The assurance is therefore given on the absence of any indication to the contrary.
In contrast, the audit report on statutory financial statements provides positive or reasonable assurance; that is the financial
statements do show a true and fair view.
Using negative assurance, the auditor is warning users that the cash flow forecast may be inaccurate. Less reliance can
therefore be placed on the forecast than the financial statements, where the positive assurance was given.
With negative assurance, the auditor is also warning that there were limited audit procedures that could be used; the cash
flow relates to the future and therefore the auditor cannot obtain all the evidence to guarantee its accuracy. Financial
statements relate to the past, and so the auditor should be able to obtain the information to confirm they are correct; hence
the use of positive assurance. |
