An agreed-upon procedure is a standard a company or client outlines when it hires an external party to perform an audit on a specific test or business process. The procedures, which are called audit standards, are designed and agreed upon by the entity conducting the audit, as well as any appropriate third parties. Show
The auditor's report on the findings is usually restricted to those parties who developed the agreed-upon procedures because of the specificity of the desired results. For example, agreed-upon procedures may be developed by one entity that is considering purchasing another business. The purchasing entity would likely develop the agreed-upon procedures to help determine specific monetary or other information about the business it may acquire. In an audit conducted under agreed-upon procedures, the auditor provides only factual findings and does not offer opinions, conclusions or assurances in the final report. Instead, the auditor's report simply presents the facts, with the audit facilitators drawing their own conclusions from the findings. This was last updated in February 2015 Continue Reading About agreed-upon procedures (AUP)
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M. Jordan & E. Stone, CPAs, audited the financial statements of Tech Company, a non-issuer, for the year ended December 31, 2019, and expressed an unmodified opinion. For the year ended December 31, 2020, Tech issued comparative financial statements. Jordan & Stone reviewed Tech's 2020 financial statements and B. Kent, an assistant on the engagement, drafted the accountants' review report that follows. Stone, the engagement supervisor, decided not to reissue the prior-year audit report but instructed Kent to include a separate paragraph in the current-year review report describing the responsibility assumed for the prior-year audited financial statements. Stone reviewed Kent's draft and indicated in the following supervisor's review notes that the draft contained several deficiencies Management's Responsibility for the Financial Statements Accountant's Responsibility Accountant's Conclusion Other
Matter Jordan and Stone, CPAs Required: What are the contents of the report on an agreed upon procedures engagement?The report on an agreed-upon procedures engagement needs to describe the purpose and the agreed-upon procedures of the engagement in sufficient detail to enable the reader to understand the nature and the extent of the work performed.
Which of the following matters would be reported in an agreed upon procedures report?Matters that should be agreed upon include the nature, timing, and extent of the procedures. requirements in an agreed-upon procedures engagement on compliance. .
Which of the following should a practitioner include in an agreed upon procedures report?A practitioner's report on agreed-upon procedures should contain which of the following statements? The procedures performed were those agreed to by the specified parties identified in the report.
What is report being issued by a practitioner in an agreed upon procedures engagement?Agreed-Upon Procedures (AUP) Engagements: the practitioner provides a report based on factual findings regarding financial information—no assurance is expressed. The report is not distributed publicly—it is restricted to those parties that have agreed to the procedures.
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