Agreed Upon Procedures (AUP) refers to a set of specific procedures and guidelines that are mutually agreed upon by multiple parties, typically a client and an independent auditor or accountant. These procedures are designed to provide limited assurance on specific subject matters or financial information, without expressing an opinion or providing a full audit. AUP engagements are conducted to meet the specific needs of the client and may involve examining, reviewing, or testing certain aspects of financial statements, internal controls, compliance with regulations, or other agreed-upon areas. The results of the agreed-upon procedures are presented in a report, which outlines the findings and conclusions based on the procedures performed. AUP engagements are commonly used when a client requires a tailored examination or verification of specific financial or non-financial information, providing stakeholders with a level of confidence in the subject matter being examined.
Agreed Upon Procedures (AUP) is a type of engagement in which a client and an auditor agree on specific procedures to be performed on specified subject matter. The procedures are agreed upon by both parties and are typically used when the client needs assurance on specific financial or non-financial information, but does not require a full audit. The auditor performs the agreed upon procedures and provides a report of findings to the client. AUP engagements are governed by professional standards and may be used in various industries and contexts to provide limited assurance on specific areas of interest.
Q: What are Agreed Upon Procedures (AUP)?
A: Agreed Upon Procedures (AUP) are a set of specific procedures agreed upon by an organisation and an independent auditor to provide limited assurance on specific subject matters or financial information.
Q: Why are Agreed Upon Procedures used?
A: Agreed Upon Procedures are used when an organisation requires a level of assurance on specific areas of their operations or financial information, but not a full audit. They are often used for specific compliance requirements or to address specific concerns.
Q: Who can perform Agreed Upon Procedures?
A: Agreed Upon Procedures can only be performed by independent auditors or accounting firms that have the necessary expertise and qualifications to conduct the agreed-upon procedures.
Q: What is the difference between an audit and Agreed Upon Procedures?
A: An audit provides reasonable assurance on the overall financial statements, while Agreed Upon Procedures provide limited assurance on specific subject matters or financial information. Audits are more comprehensive and involve a deeper examination of the organisation’s financial records and internal controls.
Q: How are the procedures determined in Agreed Upon Procedures engagements?
A: The procedures to be performed are determined through discussions between the organisation and the independent auditor. The organisation specifies the areas or subject matters they want the auditor to focus on, and the auditor suggests appropriate procedures to address those areas.
Q: Can Agreed Upon Procedures be customized to specific needs?
A: Yes, Agreed Upon Procedures engagements can be customized to meet the specific needs of an organisation. The procedures can be tailored to address specific concerns or compliance requirements.
Q: What is the level of assurance provided in Agreed Upon Procedures?
A: Agreed Upon Procedures provide limited assurance, which means that the auditor’s report will state whether anything came to their attention that indicates the subject matter or financial information being examined is not presented fairly, based on the agreed-upon procedures.
Q: Are Agreed Upon Procedures engagements subject to professional standards?
A: Yes, Agreed Upon Procedures engagements are subject to professional standards, such as the International Standards on Related Services (ISRS) or the Generally Accepted Auditing Standards (GAAS), depending on the jurisdiction.
Q: Can Agreed Upon Procedures be used for internal purposes?
A: Yes, Agreed Upon Procedures can be used for internal purposes as well. Organizations may engage independent auditors to perform specific procedures to assess the effectiveness of internal controls or compliance with internal policies.
Q: How long does an Agreed Upon Procedures
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This glossary post was last updated: 29th March 2024.
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