An agreed-upon procedures (AUP) engagement uses procedures similar to an audit, but on a more limited scale. When performing an AUP engagement, we make no formal opinion, just serve as a “fact finder”. The final report lists the procedures performed, and our findings. It is the client’s responsibility to draw conclusions based on those findings. An example of some of the scenarios where an AUP engagements can be used include, but are not limited to:
- Financial data (i.e., accounts payable, accounts receivable, or related party transactions)
- Nonfinancial information (i.e., review of internal controls, compliance with royalty agreements)
- Specific financial statement (i.e., income statement or balance sheet)
An AUP engagement can deliver several advantages to businesses and business owners.
They can be performed at any time throughout the year and can be relied on by third parties. AUP engagements are also cost effective because you, the client, have the flexibility to choose only those procedures you feel are necessary. AUP engagements can be useful in these situations, among others:
- Lenders, investors or franchisors may request an AUP engagement if they have questions or concerns about a business’s financials or internal controls
- If a business owner suspects an employee is misrepresenting the company’s financials
- M&A due diligence
- To determine compliance with regulatory requirements from organizations such as HIPAA and FISMA.
In short, AUP engagements can be performed in order to supplement audits and consulting engagements. They can also be used as a standalone service. We can help you identify and customize the appropriate AUP engagement that fits the needs of your business and stakeholders. For more information, contact John Templeton at 561-798-9988 or john@templetonco.com
