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Agreed-upon Procedures Engagement

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Agreed Upon Procedures Engagement

Understanding Agreed-upon Procedures Engagement

At our CPA office, we get a lot of calls for audit work, but most people do not understand that an audit is a very specific type of work and can be very expensive to perform.

An agreed-upon procedures engagement (AUP) or is an engagement in which an auditor/ CPA is engaged to carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on specific findings. The recipients of the report form their own conclusions from the report created by the auditor.

Only Gather What’s Needed

The report is restricted to those parties that have agreed to the procedures to be performed since others, unaware of the reasons for the procedures may misinterpret the results. For example, an agreed-upon procedures engagement may be commissioned by an entity which is acquiring another business. The entity may engage an audit to report on specific aspects of the business that it is buying.

At CPA Accounting, we can offer clients agreed up on procedures that will help them regrading their concerns.

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Some examples of agreed-upon procedures (AUP) engagement include:

  • Determining weather a tenant is providing the correct revenue amounts so that they pay their correct share
  • Making sure that shipments were sent at a certain time and not after a certain time
  • Confirming inventory counts, making sure your inventory is counted correctly (ie: an investor who wants to know if the inventory if properly stated)
  • Due diligence when buying or selling a business
  • Verifying cash balances
  • Checking security balances
  • Income tax provisions
  • Accounts receivable/payable processes
  • Special reviews of loan portfolios
  • Reviews of internal control and environmental management systems
  • Royalty agreements compliance
  • Employer compliance/payroll audits
  • Purchasing department compliance

For agreed-upon procedures engagement, we provide a detailed report that will discuss the agreed-upon procedures followed to determine what the client needs to know.

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