Agreed Upon Procedure

Engagement
 An auditor may be engage to apply
agreed-upon procedure on specific
account or element of a financial
statement.
OBJECTIV
ES
 The objective of an agreed-upon
procedure engagement is for the
auditor to carry out procedures
of an audit nature to which the
auditor and the entity and any
appropriate third parties have
agreed and to report on factual
findings.
Level of
Assurance
 As the auditor simply
provides a report of the
actual findings of agreed-
upon procedure, No
Assurance is expressed.
Restrictions on the Distribution of Report

 The report is restricted to those parties who

have agreed to the procedure to be
performed.
Terms of the Engagement
 The Auditor should ensure with
representatives of the entity and,
ordinarily, other specified parties who
will receive copies of the report of the
factual findings.
 Procedures to be Performed
Inquiry and Analysis
Observation

Recomputation, Obtaining Confirmation

Computation and other
clerical Accuracy Inspection; or
checks.
 Reporting Responsibility
● The Agreed-upon Procedure report should describe
in detail:
1. The purpose of the Engagement
2. The procedures Performed
3. The Auditor’s factual findings
 Illustrative Comparison of the audit, review, compilation and agreed-upon
Procedure
NATURE AUDIT REVIEW AGREED-UPON COMPILATION
OF PROCEDURE
SERVICE
To express an To enable the CPA to report To carry out audit To assist the client in
OBJECTIVE opinion on the fair whether anything has come procedures agreed on the preparation of the
presentation of to his attention that would with the client and any financial statements.
financial indicate that the financial appropriate third
statements statements are not parties identified in the
presented fairly. report.

Level of High or Moderate or Limited

reasonable Assurance.
Assurance Assurance .
None None

Report Positive Negative Assurance Description of Identification of

Assurance procedures performed financial information
(Opinion) and factual findings compiled and a clear
statement that no
assurance provided.

Basic Risk assessment Inquiry and Analytical As agreed Assemble FS based

procedures, test procedures on the information
Procedure of controls and provided by
s substantive tests management.
Illustrative Comparison of the audit, review, compilation and agreed-upon
Procedure

Required Sufficient to Sufficient to Sufficient to apply Sufficient to

assess the risk identify areas in the agreed upon compile the FS.
knowledge of material the FS where procedures
the entity misstatement material
misstatement are
likely to occur

Independence
Required Not Required Not Required
Requirement Required

Standards
PSA PSRE PSRS PSRS
 ASSURANCE ENGAGEMENTS
 PSAE 3000 states that assurance
engagements are intended to enhance
the credibility of information about a
subject matters by evaluating whether
the subject matter confirms in all
material respects with suitable criteria.
 Types of Assurance Engagement

 Whether a particular engagement is an assurance engagement will

depend upon whether it exhibits all the following elements:
1. A three party relationship
2. An appropriate subject matter
3. Suitable Criteria
4. Sufficient Appropriate evidence; and
5. A written assurance report