Agreed-Upon Procedures Engagements
Agreed-Upon Procedures (AUP) engagements are specialized audit services where auditors perform specific procedures agreed upon with the client and other intended users.
Summary
Agreed-Upon Procedures (AUP) engagements are specialized audit services where auditors perform specific procedures agreed upon with the client and other intended users. These engagements follow standards such as the AICPA's SSAE no. 19 or ISRS 4400. The auditor's role is limited to executing the agreed procedures and reporting factual findings without providing any opinion or assurance, allowing users to draw their own conclusions. The report strictly contains descriptions of the procedures performed and the objective results obtained. AUP engagements are limited in scope and tailored for particular needs such as transaction verification, regulatory compliance, or internal control testing. Because no assurance is given, these reports are restricted to specified users who understand their nature and limitations. This approach offers cost-effective, flexible audit services while minimizing auditor liability. Users must interpret the findings independently to make informed decisions.
| Aspect | Description |
|---|---|
| Standards | SSAE no. 19, ISRS 4400 |
| Report | Procedures performed and factual findings only |
| Assurance | No assurance or audit opinion provided |
| Intended Users | Specified users aware of report limitations |
Common Misconceptions:
- AUP engagements do not provide an audit opinion or assurance.
- The report is not for general use but for specified users only.
- Auditors do not perform procedures beyond those agreed upon.
🧠 Key Concepts
- Agreed-Upon Procedures
- Factual Findings
- Audit Standards
- Report Limitations
- User Responsibility
- Engagement Scope
- Audit Liability
- SSAE no. 19
- ISRS 4400
- Specified Users
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Agreed-Upon Procedures Engagements in Auditing
📘 Overview Agreed-Upon Procedures (AUP) engagements involve an auditor performing specific procedures agreed with the client and other specified parties. The auditor reports factual findings without expressing an opinion or assurance on the subject matter. This allows users to draw their own conclusions based on the procedures performed.
🧠 Key Idea An AUP engagement provides users with objective factual findings from specific agreed procedures without auditor assurance or opinion, enabling informed decision-making based on those findings.
⚔️ Core Details: - AUP engagements are performed under standards such as the AICPA Statement on Standards for Attestation Engagements (SSAE) no. 19 or ISRS 4400 internationally. - The agreed procedures are explicitly determined and agreed upon by the client, the auditor, and any intended users before the engagement begins. - The auditor's report in an AUP engagement contains a description of the procedures performed and the corresponding factual findings, avoiding opinions or conclusions. - The scope of an AUP engagement is limited to the agreed-upon procedures; auditors perform no additional procedures beyond the agreement. - Since there is no assurance from the auditor in AUP engagements, the report is restricted to specified users who understand the limitations and nature of the engagement.
🎯 Why It Matters: - AUP engagements offer flexibility for clients needing specific, targeted audit procedures without the cost or scope of full audits or reviews. - Users relying on AUP reports must understand the responsibility to interpret the factual findings and make their own decisions, promoting transparency. - AUP engagements reduce auditor liability by not providing assurance, but also require clear definition of procedures to avoid misunderstandings. - These engagements are commonly used in transactions, regulatory compliance, and internal controls testing when specific factual verification is needed.
🧠 Quick Recall: - Definition - Engagement where auditor performs agreed specific procedures and reports factual findings without opinion. - Standards - Governed by SSAE no. 19 or ISRS 4400. - Report Content - Description of procedures and factual findings only, no assurance given. - Users - Intended users are specified, and report use is restricted to them. - Purpose - Provide objective findings on specified subject matter without auditor opinion.
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