Question

In: Accounting

with the aid of examples differentiate between negative assurance and positive assurance.

with the aid of examples differentiate between negative assurance and positive assurance.

Solutions

Expert Solution

If an auditor is not able to to find any error while doing company audit so he will give a Negative assurance.

Negative assurance can also be seen in once opinion, when the other person says that the XYZ product is not bad it indicates that its not bad but it doesn't mean that the product is good.

On the other hand positive assurance means that everything is checked properly after which the assurance is given i.e it can be in various scenarios like in case of company audits or in the form of an opinion.

Negative & Positive assurance are just the type of expression.Difference between Negative assurance & positive assurance can be understood better with the appended example:

Lets say your friend Mr .x expressed opinion about 2 subjects:

Finance - "I have done my MBA in finance and have never found any issues learning this subject. Its a easy subject"

Economics - "I have also studied economics but doesn't remember much about it as now,. Its not tough subject"

As both expression looks the same lets understand it better.

MR. x say about Finance that its easy which means that its definitely not hard also the opinion was based on his experience . So this statement gives higher assurance but for Economics he said that Its not tough which that it is not tough but it also doesn't mean that the subject is easy too. Also his opinion states Not tough which is a negative form of expressing.


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