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Procedures performed under an attestation engagement
In order to comply with terms of engagement under an attestation, the engagement should meet the intended purpose of the engagement.
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Anderson CPA’s entered into an Agreed upon Procedure engagement with Delany Inc. Management of Delany discussed the terms of the engagement with auditors but refused to put the terms in writing. Anderson should:
SSAE 18 requires that the terms of the engagement be in writing. Because management is refusing to express the terms in writing the firm should not accept the engagement and withdraw.
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The agreed-upon procedure report should:
All of the elements are included in the terms of the engagement. The engagement must express auditor independence, identify and address and include the identification of the engaging party.
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Accepting an engagement to examine an entity's financial projection most likely would be appropriate if the projection were to be distributed to:
Financial projections are hypothetical prospective financial statements. Because the user may need to ask the responsible party questions about the underlying assumptions, financial projections are restricted use reports, whose use is restricted to the responsible party and those third parties with whom the responsible party is negotiating directly.
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An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that:
An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that certain conditions are met, including that the use of the report is restricted to the specified parties.
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Agreed-upon procedures can be performed as long as the following conditions are present:
All of these factors must be present for an agreed-upon procedure engagement to be conducted.
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