AUPs can take you many steps toward achieving the credibility you require.

An AUP engagement is pretty much what the name describes: an engagement designed by the client and the appropriate third-party or parties specifying procedures for the CPA firm to perform. The two parties understand the goal(s) to be accomplished and guide the CPA with procedures they wish to be performed against some objective criteria or framework while the CPA delivers his/her expertise and independence. Generally, CPA reports provide the firm’s “opinion” or views on a subject, but an AUP report provides “just the facts” following the outlined blueprint. It describes the steps performed and the results or findings.

The subject matter of an AUP might be financial or non-financial. And while the nature, timing, and extent of the procedures can vary widely between AUPs, two things remain consistent.

  • The report’s recipients are responsible for the sufficiency of the procedures and form their own conclusions based upon the data included in the report.
  • The AUP report is restricted to the audience that agreed to the procedures because outside parties, who are unaware of the report’s purpose, might misinterpret the results.

Yes, an Agreed Upon Procedure (AUP) Might Impact You

Steps for the AUP Process

Steps for the AUP Process

Straight Talk

Translating technical jargon into a plain English “text.”
I’m familiar with an examination service, but not with an AUP. When might I need this service?
BUSINESS MANAGER
An AUP can be performed on both financial and non-financial data. Often, people want an “audit” of a process or controls; while those types of engagement exist, they are rare because of their large scope and cost. We often see AUPs for things like testing of processes and internal controls or during business transactions. That’s because we can work with the parties to design pinpointed procedures that address the “real” questions or concerns at a reasonable cost. Similarly, we can perform these types of engagements on financial data when an audit, review, or compilation just doesn’t fit the bill.
CRI
So if I decide I’m interested in acquiring another company, then I might engage CRI to perform an AUP that evaluates their processes?
BUSINESS MANAGER
Absolutely. AUPs are also common for litigation preparation and testing of controls related to regulatory compliance—which is especially true for governments and financial institutions. We’re also utilizing AUPs to deliver ALTA compliance services to title agents.
CRI
I had no idea that there is such a wide range of services that are available depending upon my exact need. Thank you for the clarification!
BUSINESS MANAGER

Client SNAPshot

CLIENT: Large school district in Florida
INDUSTRY: Government
SCOPE: 57 engagements across six years
SERVICE: Average project construction value of approximately $18 million
RETURNS: 77% of projects realized a return. Total return over all projects is approximately $1.35 million.
Note: School board contract calls for construction manager payment of the attestation fee if the return is $10,000+. Therefore, construction managers make significant efforts to avoid having a return to the school board on the projects.
Projects that realized a return

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