Agreed-Upon Procedures

Abstract

An agreed-upon procedures engagement is one in which a practitioner is engaged by a client to issue a report of findings based on the specific procedures performed on the subject matter. The auditor should not report on an engagement when specified parties do not agree upon the procedures performed or to be performed and do not take responsibility for the sufficiency of the procedures for their purposes. The subject matter of an agreed-upon procedures engagement may take many different forms and may be at a point in time or covering a period of time.

Practice

Question 1

The auditor can perform an agreed-upon procedure attest engagement provided that:

• (a) The auditor is independent

• (b) The auditor and the specified parties agree upon the procedures performed or to be performed by the practitioner

• (c) The specific subject matter to which the procedures are to be applied is subject to reasonably consistent measurement

• (d) The procedures to be applied to the specific subject matter are expected to result in reasonably consistent findings using the criteria.

• (e) All of the above

Question 2

In an agreed-upon procedure, the auditor is responsible for all the below, except:

• (a) To carry out the procedures and report the findings in accordance with the general, fieldwork, and reporting standards

• (b) Assumes the risk that misapplication of the procedures may result in inappropriate findings being reported

• (c) Assumes the risk that appropriate findings may not be reported or may be reported inaccurately

• (d) Assumes the risk of any inappropriately use of his findings by the specified parties

Question 3

In agreed-upon procedure, the specified parties are responsible for all, except:

• (a) Assume the risk that such procedures might be insufficient for their purposes

• (b) Assume the risk that they might misunderstand or otherwise inappropriately use findings properly reported by the practitioner

• (c) Are responsible for the sufficiency (nature, timing, and extent) of the agreed-upon procedures because they best understand their own needs

• (d) Assume the risk that the auditor misapplication of the procedures may result in inappropriate findings being reported

Question 4

The following assertions are true, concerning the agreed-upon procedure engagement, except:

• (a) The subject matter of an agreed-upon procedures engagement may take many different forms and may be at a point in time or covering a period of time

• (b) The auditor should not agree to perform procedures that are overly subjective and thus possibly open to varying interpretations

• (c) Matters that should be agreed upon include the nature, timing, and extent of the procedures

• (d) The auditor should obtain evidential matter from applying the agreed-upon procedures to provide a reasonable basis for the finding or findings expressed in his or her report