Agreed Upon Procedures
The increasing complexity of business life, both in terms of structures and transactions, leads to an increasing demand for reassurance that matters of critical importance are dealt with in a manner that directors, or other stakeholders, might wish for.
Not all such matters will be appropriate subjects for audit, nor for more formal assurance reporting. In these circumstances an "agreed upon procedures" engagement can be a useful solution. This type of engagement is regulated by the International Standard on Related Services (ISRS) 4400, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information. Under such an arrangement we carry out very specific work to cover your areas of concern in a laser-focused manner. This avoids carrying out unnecessary work to provide a much broader opinion and it makes the scope of our work for you entirely clear, together with the outcomes that you might be able to expect.
The advantage of Agreed upon procedure is that the work will be limited to what is strictly necessary and will deliver the precise outcomes that you require. This could relate to a financial statement component or another written assertion. An agreed upon procedure is an engagement in which an auditor is requested by a client to issue a report of findings based on specifically agreed procedures to be performed on subject matter. For example procedures can include certain tests on accounts payable, accounts receivable, purchases, sales, etc. The objective of such engagement is to carry out procedures of an audit nature and report the factual findings.
Agreed-upon procedures are a recommended business practice in circumstances such as:
- Evaluating mergers or acquisition;
- Litigation preparation;
- Banking requirements for credit line increase or loans;
- Internal control evaluations;
- Compliance with laws and regulations reviews.
Our team perform the procedures and report the results on a factual basis and do not express an opinion or negative assurance. Instead, the report is issued in the form of procedures and findings.