Agreed – upon Procedures

Engagement
This type of engagement may be accepted
provided:
• The client takes full responsibility for the
adequacy of the procedure to be performed;
and
• The distribution of the report is limited only to
those parties who have agreed about the
procedures to be performed.
 A. Level of Assurance
• As the auditor simply provides a report of the
factual findings of agreed-upon procedures,
no assurance is expressed.
 B. Restrictions on the distribution of
report
• The report is restricted to those parties that
have agreed to the procedures to be
performed since others, unaware of the
reasons for the procedures, may misinterpret
the results.
 c. Terms of the Engagement
• The auditor should ensure with
representatives of the entity and, ordinarily,
other specified parties who will receive copies
of the report of factual findings, that there is
a clear understanding regarding the agreed
procedures and the conditions of the
engagement.
 d. Procedures and Ecidence
• The auditor should carry out the procedures agreed
upon and use the evidence obtained as the basis for
the report of factual findings. Thses are also audit
procedures but usually applied only to specific
accounts or elements of a financial statement. The
procedures may include:
– Inquiry and analysis
– Re computation, comparison and other clerical accuracy
checks
– Observation
– Inspection
– Obtaining confirmations
 e. Reporting Responsibility
• The report on an agreed-upon procedures
engagement needs to describe the purpose
and the agreed-upon procedures of the
engagement in sufficient details o enable the
reader to understand the nature and extent of
the work performed.