Negative external confirmation request: a request that the confirming party responds directly to the auditor only if the confirming party disagrees with the information provided in the request.
A negative confirmation request asks the respondent to reply only in the event of disagreement with the information provided
When are negative confirmation requests suitable?
They can be used when:
- The assessed risk of material misstatement is lower.
- The auditor has obtained sufficient appropriate evidence relating to the efficiency of the controls.
- A large number of small balances are involved.
- A substantial number of errors is not expected.
- The auditor has no reason to believe that respondents will disregard these requests.