An agreed-upon procedures engagement involves the performance of procedures of an assurance nature from which no conclusion or opinion is expressed by the assurance practitioner and no assurance is provided to intended users.  Instead only factual findings obtained as a result of the procedures performed are reported.

An assurance practitioner may be asked to perform other types of engagements for which assurance is also not provided but in contrast to agreed-upon procedures engagements, the procedures conducted are not primarily of an assurance nature. These engagements are not dealt with in this standard and include:

1. consulting (or advisory) services;
2. compilation engagements; and
3. business services, such as accounting and taxation services.

The objective of consulting services is the provision of professional advice and recommendations with respect to the subject matter. The objective of compilation engagements is the presentation of financial information in a specified form. The objective of business services is the conduct of accounting procedures, computations or the provision of business or taxation advice. These engagements are not subject to the requirements of this standard.

An agreed-upon procedures engagement is not an assurance engagement,^[1] even though similar procedures are performed, as the purpose of the procedures performed is not to obtain sufficient appropriate evidence on which to base a conclusion.  In contrast, the sufficiency and appropriateness of the evidence obtained in an assurance engagement is based on the assurance practitioner’s assessment of materiality and risk of material misstatement or non-compliance.  As the assurance practitioner does not assess materiality or engagement risk to determine the evidence gathering procedures to be performed in an agreed-upon procedures engagement, the assurance practitioner is unable to determine whether the evidence is sufficient and appropriate to reduce risk to an acceptable level as a basis for a conclusion.

ASRS 4400 addresses the assurance practitioner‟s professional responsibilities to accept agreed-upon procedures engagements to report factual findings only if:

1. the assurance practitioner has the capabilities and competence to perform the procedures;
2. assurance is not deemed to be necessary to meet the needs of intended users of the assurance practitioner‟s report;
3. the assurance practitioner is not required to determine the sufficiency of the procedures to be performed;
4. neither an assurance conclusion nor assurance opinion will be provided on the findings but the intended users may draw their own conclusions with respect to the subject matter; and
5. each of the procedures to be performed is to be clearly specified in the engagement letter.

ASRS 4400 deals with the conduct of agreed-upon procedures engagements and identifies that risk assessment, responding to assessed risks, evaluation of evidence gathered and expressing a conclusion or opinion are aspects of an assurance engagement which are not performed when no assurance is to be provided.

An agreed-upon procedures engagement may be misunderstood as providing assurance, as the engagement is performed by an assurance practitioner and involves the conduct of the same or similar procedures to an assurance engagement.  The Framework for Assurance Engagements^[2] states that the assurance practitioner should clearly distinguish a report on an engagement that is not an assurance engagement from an assurance report.  This standard deals with the content of a report of factual findings in order to differentiate it from an assurance report.

This standard deals with how the form, content and restrictions on use of an assurance practitioner’s report of factual findings helps to minimise misinterpretation and promote the intended users’ understanding of that report.