An agreed-upon procedures (AUP) engagement is an attestation engagement where a CPA or CPA firm performs specific procedures on the subject matter and issues a report of findings. The subject matter can be financial or nonfinancial. The practitioner and the client agree on the procedures to be performed. The authoritative guidance that CPAs follow for AUPs is the AICPA’s Statement on Standards for Attestation Engagements No. 19: Agreed-Upon Procedures Engagements (SSAE #19).
In certain situations, the subject matter of an AUP engagement is compliance or internal control over compliance with the requirements of specified laws, regulations, rules, contracts or grants. For these AUPs, SSAE #19 is supplemented by another authoritative AICPA standard: AT-C Section 315: Compliance Attestation (AT-C 315).
Key elements of an AUP
- The client engages the practitioner to help specified parties evaluate subject matter. There is a great deal of flexibility on what the subject matter may be. For example, it may be certain internal controls, types of transactions or compliance with laws or regulations.
- The practitioner performs the procedures as agreed upon by the client and the practitioner. The client has the ultimate responsibility to determine the sufficiency of the procedures.
- The practitioner issues a report of findings based on the procedures performed. The report does not provide an opinion or assurance.
When are AUPs used?
- AUP engagements can be used to supplement audits and consulting engagements. For example, organizations that have exceptions in their SOC 1 or SOC 2 reports may wish to correct these deficiencies after the period covered by their SOC report and demonstrate to their customers that corrective actions have been taken. These organizations can then receive an AUP report focused on testing the exception items from their SOC report to validate that the impacted controls are now operating effectively.
- They can also be used as a standalone service.
- AUP engagements can be customized to fit the needs of the organization.
Benefits
- Customization and flexibility – One of the primary benefits of AUP is the ability to tailor the procedures to meet specific needs. Businesses can focus on particular areas of concern or interest, such as specific financial transactions, internal processes, or compliance with certain regulations.
- AUP engagements can help organizations focus on analyzing key areas of their business operations.
- AUP engagements can help lenders confirm whether an organization is in compliance with its loan covenants.
Examples of Procedures and Findings
SSAE #19 provides the following examples of appropriate procedures and findings for AUP reports:
| Procedure | Findings | |
| Inspect the shipment dates for a sample of 100 shipping documents and determine whether any such dates were subsequent to January 31, 2025. | No shipment dates shown on the sample of shipping documents were subsequent to January 31, 2025. | |
| Recalculate the number of blocks of streets paved during the year ended December 31, 2024, shown on contractors’ certificates of project completion; compare the resultant number to the number in an identified chart of performance statistics as of December 31, 2024. | The number of blocks of streets paved in the chart of performance statistics was 10 blocks more than the number calculated from the contractors’ certificates of project completion. | |
| Recalculate the rate of return on a specified investment (according to an agreed-upon formula) and determine whether the resultant percentage agrees to the percentage in an identified schedule. |
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| Trace all outstanding checks appearing on a bank reconciliation as of January 31, 2025 to checks cleared in the bank statement of the subsequent month. | All outstanding checks appearing on the bank reconciliation were traced to the list of cleared checks in the subsequent month’s bank statement, except for the following:
(List all exceptions.) |
Conclusion
AUPs are a flexible reporting format that can be used for a variety of purposes. Organizations can work with their CPA to design and tailor the procedures in an AUP to fit their needs and requirements.