In an agreed upon procedures (AUP) engagement, an accountant performs specific tests agreed in advance and reports exactly what was found, without giving any opinion or conclusion. The users read the factual findings and draw their own conclusions. Because no conclusion is expressed, an AUP engagement is not an assurance engagement, and the international standard that governs it is ISRS 4400 (Revised).

What is an agreed upon procedures engagement?

ICAEW’s assurance glossary describes an AUP engagement as one in which a practitioner is engaged to carry out specific procedures agreed in advance and to report the factual findings. The crucial difference from an assurance engagement is that only factual findings are reported: no conclusion or opinion is given. The procedures may be set by a regulator or agreed between the practitioner, the organisation that requested them and any appropriate third parties.

ICAEW’s guidance on AUP adds that the practitioner’s report does not provide recommendations based on the findings, and that the value of the engagement comes from the practitioner objectively carrying out the tests with relevant expertise, saving the engaging party from doing them itself. AUP works best where the engaging parties know enough to identify the area to focus on, agree the procedures and interpret the results.

Which standard applies?

AUP engagements are classed as related services rather than assurance. The relevant standard is the IAASB’s International Standard on Related Services 4400. ICAEW lists ISRS 4400 (Revised), Agreed Upon Procedures Engagements, as revised by the IAASB in April 2020 and applying to engagements on financial or non financial subject matter. ICAEW notes the revised standard is effective for engagements whose terms are agreed on or after 1 January 2022. There is no separate UK edition issued by the FRC.

ICAEW’s guidance says that where a practitioner cannot follow ISRS 4400 in full, for example because of a specific regulatory requirement, the engagement should not be described as conducted in compliance with the standard, but the practitioner should still use it as far as possible.

What has to be agreed at the start?

ICAEW summarises the points ISRS 4400 requires to be clearly agreed with the engaging parties:

  1. The nature of the engagement, including that it is not an assurance engagement and no assurance conclusion will be expressed.
  2. A stated purpose for the engagement.
  3. The information to which the procedures will be applied.
  4. The nature, timing and extent of the specific procedures.
  5. The anticipated form of the report of factual findings.
  6. Any limitations on the use and distribution of the report.

ICAEW stresses that users relying on the report take responsibility for whether the procedures are sufficient and appropriate for their purposes. The procedures should be detailed enough to be clear and unambiguous. In practice that means writing “agree the 20 largest supplier balances at 31 March to supplier statements and report any difference” rather than “review creditors”. Clear engagement terms also help avoid scope creep; the general requirements for terms are in engagement letters for accountants.

What does the report of factual findings contain?

The report sets out the procedures performed and the findings from each, for example the number of items tested and any exceptions found. As ICAEW’s TECH 09/13AAF puts it, the result is a report of purely factual findings: the user is left to draw their own conclusions. Because no conclusion is expressed, an AUP report should not contain language such as “nothing has come to our attention” or “in our opinion”. ICAEW’s AUP guidance says the report is worded to restrict access or reliance to the parties that agreed the procedures, because others who do not know why the procedures were chosen may misread the findings.

Limiting who may rely on the report is a key risk control. See limiting liability in engagement letters for the contractual side.

Does the accountant need to be independent?

ICAEW states that independence is not a requirement for an AUP engagement, although the specific terms of an engagement may require the practitioner to refer to independence requirements. The fundamental ethical principles still apply: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. This means an accountant who prepares a client’s accounts can usually also carry out AUP work for that client, provided the terms do not require independence. The detailed position under the ICAEW Code is covered in independence in non audit assurance work.

ICAEW’s assurance options leaflet also warns that, unlike an audit, agreed upon procedures are not a regulated service, so quality depends on the skill and integrity of the accountant chosen.

What are typical uses?

ICAEW gives examples for the business’s own use, such as sample stock counts and three way matching, vouching the physical existence of fixed assets at remote sites, and checking payroll calculations against contracts and timesheets. For third parties, it gives royalty calculations under a licensing contract and grant returns, where eligible costs are vouched to supporting documents. ACCA notes uses such as quantifying an insurance claim or a loss suffered through fraud.

A current public sector example is the Department for Work and Pensions’ Housing Benefit (Subsidy) Assurance Process. DWP’s reporting framework instruction for the year ending 31 March 2026 requires a reporting accountant, engaged by the local authority on tripartite terms, to work under ISRS 4400 (Revised) and provide a report of factual findings on the subsidy claim by 30 November 2026. The instruction states that the reporting accountant will not check or verify information except as expressly set out in the specified tests, and that the work should not be relied on to disclose all misstatements, fraud or errors.

When is AUP the wrong choice?

ICAEW flags several situations:

  • Grant or contract terms requiring an opinion. Some grant terms require a formal assurance opinion, so the grant offer letter must be read carefully.
  • The word “audit” in agreements. Third party agreements may say “audit” when AUP is the intended scope. The engagement letter must make clear which is being provided.
  • High risk decisions. AUP work over stock and debtors in a target business is sometimes called “due diligence lite”, but a low level of comfort may not suit an acquisition or investment decision, and lenders for a transaction may expect full due diligence.
  • Users who cannot interpret findings. The practitioner should be satisfied that management has the skills to use the findings rather than placing undue reliance on the report.

Where the user wants a conclusion on a whole set of accounts, a review engagement or an audit is more suitable.

What does an AUP engagement look like in practice?

Illustration only. A charity receives a 60,000 pound capital grant and the funder asks for an accountant’s report on the expenditure return. The offer letter does not require an opinion, so the accountant, the charity and the funder agree four procedures: agree every item over 1,000 pounds on the return to an invoice and bank statement; check each invoice is dated within the grant period; recalculate the return’s total; and agree the grant receipt to the bank statement. The report lists each procedure and the result, for example “we agreed 14 items totalling 52,300 pounds to invoices and bank statements; one invoice of 2,100 pounds was dated after the grant period”. The funder decides whether to accept that item. For how the grant itself is accounted for, see accounting for government grants.

Common mistakes include adding an overall conclusion at the end of the report, using vague procedures such as “review” or “consider” that cannot produce factual findings, and accepting procedures that the user has not confirmed are sufficient for its purpose.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.