Agreed-Upon Procedures
An agreed-upon procedures engagement is one in which a practitioner is engaged to issue, or does issue, a practitioner's report of findings based on specific agreed-upon procedures applied to subject matter for use by specified parties. Because the specified parties require that findings be independently derived, the services of a practitioner are obtained to perform procedures and report the practitioner's findings. The specified parties determine the procedures they believe to be appropriate to be applied by the practitioner.
Because the needs of specified parties may vary widely, the nature, timing, and extent of the agreed-upon procedures may vary, as well; consequently, the specified parties assume responsibility for the sufficiency of the procedures because they best understand their own needs. In an agreed-upon procedures engagement, the practitioner does not perform an examination or a review and does not provide an opinion or conclusion. Instead, the report on agreed-upon procedures is in the form of procedures and findings.
Introduction to Performing Agreed-Upon Procedures Engagements
Statements on Standards for Attestation Engagements (SSAEs) are issued by the Auditing Standards Board (ASB). Those standards relevant to agreed-upon procedures engagements are as follows:
AT-C Section 105: Concepts Common to All Attestation Engagements
AT-C Section 105.01-04: Concepts Common to All Attestation Engagements
"Introduction
.01 This section applies to engagements in which a CPA in the practice of public accounting is engaged to issue, or does issue, a practitioner's examination, review, or agreed-upon procedures report on subject matter or an assertion about subject matter (hereinafter referred to as an assertion) that is the responsibility of another party. (Ref: par. .A1)
.02 An attestation engagement is predicated on the concept that a party other than the practitioner makes an assertion about whether the subject matter is measured or evaluated in accordance with suitable criteria. Section 205, Examination Engagements; section 210, Review Engagements; and section 215, Agreed-Upon Procedures Engagements, require the practitioner to request such an assertion in writing when performing an examination, review, or agreed-upon procedures engagement. In examination and review engagements, when the engaging party is the responsible party, the responsible party's refusal to provide a written assertion requires the practitioner to withdraw from the engagement when withdrawal is possible under applicable laws and regulations. In examination and review engagements, when the engaging party is not the responsible party and the responsible party refuses to provide a written assertion, the practitioner need not withdraw from the engagement but is required to disclose that refusal in the practitioner's report and restrict the use of the report to the engaging party. In an agreed-upon procedures engagement, the responsible party's refusal to provide a written assertion requires the practitioner to disclose that refusal in the report.
.03 This section is not applicable to professional services for which the AICPA has established other professional standards, for example, services performed in accordance with (Ref: par. .A2–.A3)
a. Statements on Auditing Standards,
b. Statements on Standards for Accounting and Review Services, or
c. Statements on Standards for Tax Services.
.04 An attestation engagement may be part of a larger engagement, for example, a feasibility study or business acquisition study that also includes an examination of prospective financial information. In such circumstances, the attestation standards apply only to the attestation portion of the engagement."
AT-C Section 105.05-09: Objectives of Conducting an Attestation Engagement
"Compliance With the Attestation Standards
.05 The "Compliance With Standards Rule" (ET sec. 1.310.001) of the AICPA Code of Professional Conduct requires members who perform professional services to comply with standards promulgated by bodies designated by the Council of the AICPA.
Relationship of Attestation Standards to Quality
Control Standards
.06 Quality control systems, policies, and procedures are the responsibility of the firm in conducting its attestation practice. Under QC section 10, AFirm's System of Quality Control, the firm has an obligation to establish and maintain a system of quality control to provide it with reasonable assurance that (Ref: par. .A4–.A6)
a. the firm and its personnel comply with professional standards and applicable legal and regulatory requirements and
b. practitioners' reports issued by the firm are appropriate in the circumstances.
.07 Attestation standards relate to the conduct of individual attestation engagements; quality control standards relate to the conduct of a firm's attestation practice as a whole. Thus, attestation standards and quality control standards are related, and the quality control policies and procedures that a firm adopts may affect both the conduct of individual attestation engagements and the conduct of a firm's attestation practice as a whole. However, deficiencies in or instances of noncompliance with a firm's quality control policies and procedures do not, in and of themselves, indicate that a particular engagement was not performed in accordance with the attestation standards.
Effective Date
.08 This section is effective for practitioners' reports dated on or after May 1, 2017.
Objectives
.09 In conducting an attestation engagement, the overall objectives of the practitioner are to
a. apply the requirements relevant to the attestation engagement;
b. report on the subject matter or assertion, and communicate as required by the applicable AT-C section, in accordance with the results of the practitioner's procedures; and
c. implement quality control procedures at the engagement level that provide the practitioner with reasonable assurance that the attestation engagement complies with professional standards and applicable legal and regulatory requirements."