What Is an Agreed-Upon Procedures Engagement?

An Agreed-Upon Procedures engagement is an engagement where a practitioner performs procedures that have been agreed between:

The engaging party;
The practitioner; and
Where applicable, other intended users.

The procedures may relate to a specific:

Transaction;
Account balance;
Financial information;
Business activity;
Source of funds;
Expense category;
Compliance matter.

The practitioner reports the results of the procedures performed.

The report generally describes:

The procedure performed; and
The factual finding identified.

The practitioner does not provide an opinion on the overall information.

What Is the Difference Between an AUP Engagement and an Audit?

This is one of the most important distinctions.

Area	Financial Statement Audit	Agreed-Upon Procedures
Scope	Broad financial statement examination	Specific agreed procedures
Procedures	Determined based on audit standards and risks	Agreed in advance
Result	Audit opinion	Factual findings
Assurance	Provides reasonable assurance	No assurance conclusion
Flexibility	Structured audit framework	Highly tailored
Users	Generally broad financial statement users	Specific intended users

An audit answers a question such as:

Do the financial statements present fairly, in all material respects, in accordance with the applicable financial reporting framework?

An AUP engagement answers a different question:

What factual findings result from performing these specific agreed procedures?

Does an AUP Engagement Provide an Audit Opinion?

No.

An AUP report does not provide:

An audit opinion;
A review conclusion;
A certification that information is accurate in all respects.

Instead, the practitioner reports factual findings based on the agreed procedures.

For example:

Procedure

Inspect bank statements and supporting documents for selected shareholder funding transactions.

Factual Finding

The practitioner identified that the selected transactions were supported by the documents examined.

The practitioner does not necessarily conclude that:

All transactions were correct;
All transactions were complete;
The entire financial position is accurate.

The report should clearly state the nature and limitations of the engagement.

Why Do Businesses Use AUP Engagements?

Businesses may require an AUP engagement when a specific issue needs to be examined.

Examples include:

Shareholder Funding

Verification of amounts introduced by shareholders.

Use of Funds

Review of whether funds were used for agreed business purposes.

Specific Transactions

Examination of selected transactions.

Revenue Verification

Review of revenue records against supporting documentation.

Expense Verification

Examination of specific expenses.

Asset Verification

Review of selected assets and supporting records.

Investor Requirements

Verification of specific financial information for an investor.

Lender Requirements

Examination of specific information requested by a lender.

The engagement can be designed around the specific requirements of the intended users.

How Does an AUP Engagement Work?

A typical engagement may involve the following steps.

Step 1: Identify the Objective

The first step is to understand why the engagement is required.

For example:

To verify selected shareholder funding transactions and assess whether the funds were used for business purposes.

The objective should be clear.

Step 2: Identify the Information to Be Examined

The engagement may involve:

Bank statements;
General ledgers;
Invoices;
Contracts;
Payment records;
Payroll records;
Expense reports.

The specific information depends on the objective.

Step 3: Agree the Procedures

The procedures should be clearly defined.

For example:

Obtain the list of shareholder funding transactions;
Agree selected transactions to bank statements;
Trace selected payments to accounting records;
Inspect supporting invoices;
Review the stated business purpose;
Report factual findings.

The procedures should be specific enough to avoid ambiguity.

Step 4: Perform the Procedures

The practitioner performs only the procedures that have been agreed.

The work may involve:

Inspection;
Recalculation;
Comparison;
Tracing;
Confirmation;
Observation;
Analysis.

The procedures should be documented.

Step 5: Record the Findings

The practitioner documents the factual findings.

For example:

Procedure Performed

Compared selected payments with bank statements.

Factual Finding

The selected payments were identified in the bank statements reviewed.

The finding should be factual and objective.

Step 6: Prepare the AUP Report

The final report may include:

Objective;
Responsibilities;
Scope;
Procedures performed;
Factual findings;
Limitations;
Intended users.

The report should clearly communicate what was and was not performed.

What Types of Procedures Can Be Included?

The procedures depend on the engagement objective.

Inspection

Reviewing documents or records.

Examples:

Invoices;
Contracts;
Bank statements.

Recalculation

Checking mathematical accuracy.

Examples:

Totals;
Interest;
Calculations.

Comparison

Comparing information from different sources.

Examples:

Accounting records to bank statements;
Invoices to payment records.

Tracing

Following a transaction through the accounting records.

For example:

Invoice;
Ledger;
Bank payment.

Confirmation

Obtaining confirmation from a third party where appropriate.

Analytical Procedures

Analysing relationships and trends in information.

The procedures should be selected based on the objective.

What Is a Typical AUP Engagement Scope?

A typical scope may include:

Background

Understanding the purpose of the engagement.

Period

Defining the relevant period.

For example:

January 2025 to May 2026.

Population

Identifying the transactions or information to be examined.

For example:

Shareholder funding transactions;
Less than 250 entries.

Procedures

Defining exactly what will be performed.

Reporting

Explaining how the factual findings will be presented.

A clearly defined scope helps ensure that the engagement meets the intended requirements.

Example: Shareholder Funding AUP Engagement

Consider a business that wants to verify shareholder funding.

The agreed objective may be:

To perform specific procedures over shareholder funding received between January 2025 and May 2026 and report factual findings relating to the receipt and use of the funds.

The procedures may include:

Obtain the shareholder funding schedule;
Agree selected receipts to bank statements;
Compare recorded amounts to the accounting records;
Review selected expenditure funded by the contributions;
Inspect supporting invoices and payment records;
Report factual findings.

The report would describe the procedures and findings.

It would not provide an audit opinion on the company's entire financial statements.

AUP Engagements and Sampling

Depending on the agreed scope, the procedures may cover:

100% of Transactions

All transactions are examined.

This may be appropriate where the population is relatively small.

Selected Transactions

Specific transactions are selected based on agreed criteria.

Sample-Based Testing

A sample is selected according to an agreed methodology.

The approach should be clearly documented.

The report should explain the extent of the procedures performed.

What Are the Benefits of an AUP Engagement?

Flexible Scope

The engagement can be tailored to specific requirements.

Focused Review

The work focuses on the relevant transactions or information.

Clear Factual Findings

The report provides findings based on procedures performed.

Useful for Specific Stakeholder Requirements

AUP engagements may be suitable for investors, lenders or other users.

Potentially More Efficient

A focused engagement may be more efficient than a full audit where a full audit is not required.

Transparency

The intended users can see what procedures were performed.

What Are the Limitations of an AUP Engagement?

An AUP engagement has important limitations.

The practitioner:

Does not provide an audit opinion;
Does not provide an overall assurance conclusion;
Does not necessarily examine all transactions;
Performs only the agreed procedures;
Does not provide a general conclusion on the financial statements.

The users of the report are responsible for interpreting the findings.

For this reason, the procedures must be carefully designed.

AUP Engagement vs Review Engagement

An AUP engagement is different from a review engagement.

Area	AUP	Review
Procedures	Agreed specific procedures	Review procedures determined by practitioner
Result	Factual findings	Limited assurance conclusion
Opinion	No	Limited conclusion
Scope	Tailored	Based on applicable review framework

The appropriate engagement depends on the information needs of the user.

AUP Engagement vs Certification

A certification generally involves a practitioner providing a formal statement or certification based on specified criteria.

An AUP engagement focuses on performing agreed procedures and reporting factual findings.

The correct engagement type should be determined based on:

The purpose;
The intended users;
The required level of assurance;
The nature of the information.

Who Can Request an AUP Engagement?

An AUP engagement may be requested by:

Business owners;
Directors;
Shareholders;
Investors;
Lenders;
Government entities;
Regulators;
Business partners.

The intended users should be identified before the engagement begins.

What Information Is Required for an AUP Engagement?

The required information depends on the scope.

It may include:

Bank statements;
General ledger;
Trial balance;
Invoices;
Contracts;
Payment records;
Payroll information;
Shareholder agreements;
Supporting schedules.

The business should provide complete and accurate information.

The quality of the factual findings depends significantly on the information available.

What Should Be Included in an AUP Engagement Letter?

An engagement letter should clearly define:

Objective

Why the engagement is being performed.

Scope

What information is included.

Period

The relevant period.

Procedures

The specific procedures to be performed.

Responsibilities

Responsibilities of management and the practitioner.

Reporting

The form and intended users of the report.

Limitations

The nature of the engagement and the absence of an assurance conclusion.

Fees and Timeline

Commercial and delivery arrangements.

A clear engagement letter helps avoid misunderstandings.

Common Mistakes in AUP Engagements

Vague Procedures

Procedures should be specific and measurable.

Unclear Objective

The purpose of the engagement should be clearly defined.

Expecting an Audit Opinion

An AUP report is not an audit report.

Expanding the Scope Without Agreement

Additional procedures should be formally agreed.

Incomplete Documentation

Supporting documents should be made available.

Confusing Findings With Conclusions

The practitioner reports factual findings rather than general conclusions.

When Is an AUP Engagement Appropriate?

An AUP engagement may be appropriate when:

A specific transaction needs to be examined;
A lender requires specific verification;
An investor requires factual information;
Shareholder funding needs to be reviewed;
The use of funds needs to be examined;
Selected expenses need to be verified;
A specific financial balance requires examination.

It may not be appropriate where the user requires:

An audit opinion;
A review conclusion;
Broad assurance over financial statements.

The engagement should match the intended purpose.

Practical AUP Engagement Preparation Checklist
Objective

Is the purpose of the engagement clearly defined?
Are the intended users identified?
Is the relevant period defined?

Scope

Is the information to be examined identified?
Is the population clearly defined?
Are the procedures specific?

Documentation

Are bank statements available?
Are accounting records complete?
Are supporting invoices available?
Are contracts and agreements available?

Reporting

Are factual findings clearly defined?
Are limitations understood?
Is the report format agreed?
Are the intended users identified?

Engagement Management

Is the engagement letter signed?
Are responsibilities clearly allocated?
Is the timeline agreed?
Are fees and payment terms confirmed?

Frequently Asked Questions

What is an Agreed-Upon Procedures engagement?

It is an engagement where a practitioner performs specific procedures agreed with the engaging party and reports the resulting factual findings.

Does an AUP engagement provide an audit opinion?

No. An AUP report does not provide an audit opinion or an overall assurance conclusion.

What is the difference between an AUP and an audit?

An audit provides an opinion based on a broad examination of financial statements. An AUP engagement performs specific procedures and reports factual findings.

Can an AUP engagement cover only selected transactions?

Yes. The scope can be designed to cover selected transactions, a defined population or all transactions.

Can AUP procedures be designed for shareholder funding?

Yes. AUP engagements can be designed to examine shareholder contributions, bank receipts and the use of funds.

Is an AUP engagement suitable for investors?

It may be suitable where investors require factual findings relating to specific financial information or transactions.

Can an AUP engagement verify the use of funds?

Yes. Specific procedures can be agreed to examine how funds were received and used.

Who interprets the findings in an AUP report?

The intended users of the report are generally responsible for evaluating the factual findings and drawing their own conclusions.

Is an AUP engagement the same as a certification?

No. An AUP engagement involves agreed procedures and factual findings. A certification may involve a formal statement based on specified criteria.

How ZILE Global Can Help

ZILE Global provides Agreed-Upon Procedures and special assignment services to businesses, shareholders, investors and other stakeholders in the UAE.

Our services include:

Financial AUP Engagements

Review of Selected Transactions;
Verification of Shareholder Funding;
Use of Funds Review;
Revenue Verification;
Expense Verification.

Financial Information Procedures

Bank Transaction Review;
Accounting Record Comparison;
Balance Verification;
Supporting Document Review.

Business and Investor Support

Investor Due Diligence Support;
Lender Information Verification;
Shareholder Reporting Support;
Transaction-Specific Reviews.

Special Assignments

Financial Investigations;
Specific Compliance Reviews;
Data Analysis;
Reconciliation Procedures.

Our approach is to clearly define the objective, agree practical procedures and report factual findings in a structured and transparent manner.

Consultation Request

Do You Need an Agreed-Upon Procedures Engagement?

An AUP engagement may be appropriate when you need specific financial or operational information examined without commissioning a full financial statement audit.

The key to a successful AUP engagement is a clearly defined:

Objective;
Scope;
Period;
Population;
Procedure; and
Reporting requirement.

ZILE Global can help you design and perform an AUP engagement tailored to your specific requirements.

Speak with our Audit and Assurance specialists today.

Contact ZILE Global to discuss your Agreed-Upon Procedures requirements.

Publication Author

Hameed

Managing Partner

Chartered Accountant & Senior Corporate Advisor providing strategic advice to UAE mainland & free zone enterprises on corporate tax, audit, and regulatory compliance.

Back to Insights

What Is an Agreed-Upon Procedures Engagement?

Key Takeaways