Agreed Upon Procedures
You Can Rely On

Businesses often request agreed-upon procedures when they need grant compliance AUP of certain information. Common situations include verifying contract compliance, confirming revenue calculations, reviewing grant spending, validating financial information for lenders or investors, or investigating specific financial concerns. Because the procedures are customized and limited in scope, agreed-upon procedures engagements can be a practical option.

No. The key difference between agreed-upon procedures and an audit is the level of assurance provided. In an audit, a CPA performs extensive testing and then issues an opinion on whether the financial statements present the entity’s financial position fairly. In an agreed-upon procedures engagement, the CPA does not provide an opinion or assurance. Instead, the CPA performs only the agreed-upon procedures and reports the factual results, allowing users of the report to evaluate the findings and draw their own conclusions.

Lenders, investors, nonprofit boards, grant providers, regulators, and company management commonly request agreed-upon procedures reports to obtain independent verification of specific information. In addition, these parties may want an independent CPA to verify certain financial data or confirm compliance with specific requirements. For example, a lender may request procedures to confirm the revenue figures used in loan agreements, while a grant provider may request procedures to verify how the organization spent grant funds. Therefore, the report provides objective findings that help stakeholders evaluate the information independently.

Yes. Many county and state agencies require agreed-upon procedures engagements to verify cost reports or reimbursement schedules. In addition, a CPA performs procedures on selected financial data and reports the findings for reimbursement.

Yes. CPAs can complete many agreed-upon procedures engagements remotely by using secure document sharing, encrypted client portals, and virtual communication to review records, perform the agreed procedures, and report the findings. Clients may provide financial records electronically. Therefore, this allowing the CPA to perform the agreed procedures and issue the report without requiring an on-site visit in many cases.

The timeline for an agreed-upon procedures engagement depends on the complexity of the procedures and the availability of information needed to perform the work. Simpler engagements that involve verifying a small set of transactions or financial data may take only a short period of time, while more complex procedures involving multiple areas of the organization may take longer. Because the parties define the procedures in advance and limit the scope to those specific steps, CPAs can complete agreed-upon procedures engagements more quickly than audits or reviews.

Agreed-upon procedures engagements are performed in accordance with the Statements on Standards for Attestation Engagements (SSAE) issued by the American Institute of Certified Public Accountants.