AGREED UPON PROCEDURES
We can also perform agreed-upon procedures relating to financial information (ISRE 4400) which are procedures agreed between an entity and a third party to produce factual findings about financial information or operational processes.
For example procedures can include certain tests on accounts payable, accounts receivable, purchases, sales, etc. The objective of such is to carry out procedures of an audit nature and report the factual findings.
The auditor’s report on the findings is usually restricted to those parties who developed the agreed-upon procedures because of the specificity of the desired results. For example, agreed-upon procedures may be developed by one entity that is considering purchasing another business. The purchasing entity would likely develop the agreed-upon procedures to help determine specific monetary or other information about the business it may acquire.
In an audit conducted under agreed-upon procedures, the auditor provides only factual findings and does not offer opinions, conclusions or assurances in the final report. Instead, the auditor’s report simply presents the facts, with the audit facilitators drawing their own conclusions from the findings.