This type of assurance is normally given to investment bankers and the SEC when the financial data are being used for stock and bond issuance.
In addition, this assurance is given whenever a CPA is asked to comment on financial statements upon which a previous Audit Opinion has been rendered.
Negative assurance is also issued for in review engagements, which are a similar but lower level of service when compared to an audit.
Negative assurance comments are made on unaudited financial statements and subsequent changes, indicating that nothing came to the auditor's attention that suggests the statements do not comply with applicable accounting requirements; are not fairly presented in conformity with GAAP applied on a consistent basis; or do not fairly present information shown therein.
Negative assurance is given because the auditor has not made an examination in conformity with Generally Accepted Auditing Standards (GAAS).