During an agreed-upon procedures engagement a qualified accountant will discuss with you and agree a set of procedures to perform that are based on your requirements.
The procedures and tests should be sufficiently detailed so as to be clear and unambiguous, and discussed and agreed in advance with the engaging parties so that the factual findings are useful to them and, depending upon the engagement, others to whom the report is made available. The practitioner’s report does not express a conclusion, and therefore it is not an assurance engagement in the technical sense. It does not provide recommendations based on the findings. The report is worded so as to restrict access and/or reliance on it to those parties that have agreed to the procedures to be performed since others, unaware of the reasons for the procedures, may misinterpret the findings. The specified parties review the procedures and findings in the practitioner’s report and use the information to draw their own conclusions The value of AUP comes from the practitioner objectively carrying out procedures and tests with relevant expertise thus saving the engaging party carrying out the procedures and tests themselves. AUP are most effective where the engaging parties are knowledgeable enough to identify the area or matter to focus on, discuss and agree the procedures to be performed, and interpret the findings in their own decision making. AUP can also be a powerful tool where a client initially seeks a practitioner’s support for assertions for which sufficient work cannot be performed or evidence obtained. For example, management or users of forecast information may ask the practitioner to issue a conclusion concerning the future performance of the client; the practitioner cannot support a conclusion on this subject by any amount of work. Issuing such unsupportable conclusions may give rise to misunderstandings such that the practitioner may potentially become the equivalent to insurers or guarantors of the client’s obligation to third parties. Instead, the practitioner may effectively propose an AUP engagement on forecasts, testing relevant control procedures and agreeing committed future transactions to source documentation. Although the practitioner will not be able to draw a conclusion on how such procedures may affect future performance, informed users may find the AUP engagement useful to form their own conclusion based on the findings reported by the practitioner. The practitioner’s involvement in supporting and challenging management’s determination of the procedures to be performed can enhance the robustness of the information by guiding management to consider the extent to which information ought to be internally consistent and/or derived from evidence. Critical considerations