An Agreed-Upon Procedures (AUP) engagement is one in which a licensed CPA firm, such a Morice & Layton, is engaged by a client to issue an independent report of findings based on specific procedures performed on specified subject matter. Agreed-Upon Procedures engagements are covered under the attestation standard AT Section 201, promulgated by the American Institute of Certified Public Accountants (AICPA).
The key elements in an Agreed-Upon Procedures engagement are:
Examples of AUPs might include special reviews of a loan portfolio or internal control systems. The users of reports based on agreed-upon procedures must draw their own conclusions on the results of the tests reported. For example, Morice & Layton could be asked to look at a certain number of mortgage loan files and document which of the required forms are present. The auditor would report on the selection and the results of the procedures performed, but would not provide a formal opinion with conclusions drawn from the results of the procedures.
Additional situations where an Agreed-Upon Procedures engagement would be warranted include: