Negative Confirmation

Negative Confirmation: Definition, Uses, and Examples

What is a negative confirmation?

A negative confirmation is a request that asks the recipient to reply only if there is an error, discrepancy, or objection. If the recipient does not respond by the stated deadline, their silence is taken as agreement with the information provided. Negative confirmations are commonly used to reduce reply volume and administrative follow-up.

How it works

• Sender provides specific information to the recipient (e.g., account balance, upcoming change, or transaction amount).
• The communication clearly states that no reply is necessary if the information is correct.
• Recipients reply only to report discrepancies or to opt out of an action.
• Non-response is treated as confirmation that the information is accurate.

Negative vs. positive confirmation

• Negative confirmation: response required only for exceptions; non-response implies agreement. Efficient but provides weaker evidence.
• Positive confirmation: explicit response required from all recipients, regardless of agreement. More reliable but time- and resource-intensive.

Common uses and examples

Auditing and accounting

Auditors sometimes send negative confirmations to a sample of a company’s customers, asking recipients to reply only if their records disagree with the amounts reported on the company’s financial statements. This method is typically used when internal controls are strong and the risk of errors is low.

Example: A manufacturer records $6 million of sales to a dealer. The negative confirmation asks the dealer to respond only if their records show a different amount.

Employee retirement plans (401(k) auto-escalation)

Recordkeepers send negative consent notices ahead of automatic contribution increases. Employees are informed the increase will occur unless they opt out by a specified date. Only those who want to decline the change reply.

Other business communications

Companies use negative confirmations to limit incoming correspondence for routine items such as subscription renewals, minor policy updates, or administrative notices where widespread agreement is expected.

Advantages

• Reduces the volume of replies and administrative burden.
• Lowers follow-up costs and saves time when many recipients are expected to agree.
• Appropriate for low-risk, routine confirmations.

Limitations and risks

• Non-response provides weaker assurance than affirmative replies; silence may reflect inattention rather than agreement.
• Not appropriate when the risk of material misstatement or fraud is high, or where recipients may overlook the request.
• Response rates can be low; auditors or senders should consider alternative procedures if responses are insufficient.

Best practices

• Make the purpose and required action explicit (clear instructions and deadline).
• Provide an easy, accessible method to respond (prepaid return, simple online form).
• Use negative confirmations only when risk is low and prior evidence supports their use.
• If response rates are low or results are unclear, follow up with positive confirmations or alternative verification procedures.

Key takeaways

• Negative confirmations ask recipients to reply only for problems or opt-outs; non-response is treated as agreement.
• They are efficient for routine, low-risk situations but yield weaker evidence than positive confirmations.
• Use them selectively and supplement with stronger verification when the risk or complexity warrants it.