Situations where negative confirmation is more suitable for collecting audit evidence as compared to positive confirmation.

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.

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