Agreed-Upon Procedures / Attestation

Service description

An agreed-upon procedures engagement has a CPA perform a specific set of procedures that the business or a counterparty defines — checking that certain invoices were paid, that inventory counts tie out, or that a contract's terms were followed — and report only the findings, without expressing an opinion. It's a bounded, purpose-specific alternative to a full audit or review.

Common industries

Any business a counterparty — a lender, franchisor, or acquirer — asks to verify something specific.

ROI

Delivers exactly the verification a counterparty asked for, no more, at a bounded, purpose-specific cost.

Benefit

A CPA performs and reports on specific procedures you or a third party define — a targeted alternative to a full audit.

Why get it

A full audit or review answers a broad question about the financial statements as a whole; an agreed-upon procedures engagement answers a narrower, specific question a counterparty actually asked, at a lower cost.

When you benefit

One-off or recurring depending on what triggers it — a single transaction like a sale, or a recurring check a franchisor or lender requires on a set schedule.

What it costs

Usually a fixed fee, scoped to the number and complexity of the procedures performed.

When you pay

Commonly billed as one fee once the procedures are agreed, due at or after delivery of the report.

Other costs

None beyond the engagement fee, unless the procedures turn up an issue that needs further work to resolve.

Risks to know

The report only covers exactly what the procedures tested, so procedures that are too narrow can miss something the requesting party actually cared about. Because the CPA expresses no opinion, the report is only as useful as the procedures were well chosen.

When risks arise

The procedures have to be agreed and scoped correctly before fieldwork starts; a scope that misses something important is a planning-stage risk, not something fieldwork itself can fix.

The process

The CPA and the engaging party agree on the specific procedures to perform, the CPA carries them out, and reports its findings — without an opinion — to the parties who agreed to the procedures.

Your commitment

The business, together with whoever requested the engagement, agrees on the specific procedures to be performed, and gives the CPA access to the records and staff needed to carry them out.

Documents to gather

• The specific requirement or question the procedures need to address
• Records supporting the transactions or balances the procedures will test
• Any prior agreed-upon procedures report covering the same subject

Helpful reading

• More flexibility for agreed-upon procedures — Journal of Accountancy
• New possibilities when performing attestation services — Journal of Accountancy