An agreed-upon procedures (AUP) engagement involves performing specifically agreed actions on financial or nonfinancial subject matter and reporting factual results. The report communicates no assurance and expresses neither an examination opinion nor a review conclusion about the subject matter.
A finding states what a specified procedure revealed, including any exceptions, without evaluating the subject matter as a whole. A compilation also provides no assurance, but its report does not supply agreed-upon procedures findings.
HIGH-FREQUENCY: Identify the promised output before selecting a report. Factual findings support an agreed-upon procedures report even when every tested item passes.
The American Institute of Certified Public Accountants (AICPA) establishes the Statements on Standards for Attestation Engagements (SSAEs) used for the engagements illustrated here.
- Regime: For the nonissuer engagements in this lesson, the common attestation requirements and the agreed-upon procedures provisions govern.
- Report: The practitioner reports procedures and findings, with the purpose and responsibilities explained; no audit opinion terminology applies.
- Independence: The practitioner evaluates the applicable attestation independence requirements separately from the parties' agreement about procedures.
Common mistakes
- Approval inferred from availability. A file containing an invoice supplies no evidence of the purchasing manager's signature unless the agreed inspection actually establishes that attribute.
- Unstated exceptions threshold. Suppressing a $1 difference because it falls below audit materiality changes the agreed reporting terms.
- Missing work called a finding. An unavailable invoice prevents an amount comparison; “no difference” falsely implies that comparison occurred.
Bottom line
- Agreed-upon procedures reports pair specific work with factual findings and provide neither an opinion, a review conclusion, nor assurance.
- The engaging party agrees to the procedures and acknowledges their appropriateness; the responsible party remains responsible for the subject matter.
- Required written agreement and acknowledgment must precede issuance, and refusal requires withdrawal.
- Independence remains necessary for ordinary engagements, with family-employment facts evaluated using actual duties and applicable exceptions.
Exam shortcut
Identify the requested output first. When the answer calls for specific findings, eliminate choices supplying an examination opinion or review conclusion. Match every claimed result to an action, selected item, record, and criterion. Watch for an unavailable document disguised as a successful comparison. Check agreement and independence separately, then assess use restrictions.
The full lesson (about 4,148 words, 28 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- IV.B2
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