Definition

agreed-upon procedures (AUP)

Contributor(s): Ben Cole

An agreed-upon procedure is a standard a company or client outlines when it hires an external party to perform an audit on a specific test or business process. The procedures, which are called audit standards, are designed and agreed upon by the entity conducting the audit, as well as any appropriate third parties.

The auditor's report on the findings is usually restricted to those parties who developed the agreed-upon procedures because of the specificity of the desired results. For example, agreed-upon procedures may be developed by one entity that is considering purchasing another business. The purchasing entity would likely develop the agreed-upon procedures to help determine specific monetary or other information about the business it may acquire.

In an audit conducted under agreed-upon procedures, the auditor provides only factual findings and does not offer opinions, conclusions or assurances in the final report. Instead, the auditor's report simply presents the facts, with the audit facilitators drawing their own conclusions from the findings.

This was last updated in February 2015

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Which agreed-upon procedures will you request for your company's next audit?
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Following our past experiences with audits, we have discovered that its always vital to design agreed upon procedures before any audit. Such procedures may vary from one audit to the other. In the coming company's audit, we plan to request financial projections or forecasts for our enterprise. Financial projections and forecasts are usually based on future events rather than historical events. We will require the auditor to provide facts and figures but offer no opinions.
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Yes agreed upon procedures will likely continue to be very important in the digital age as companies are forced to track and analyze increasing amounts of data. The company can use AUPs to instruct auditors on what information they are seeking to get "just the facts", and the company can use that information to draw it's own analytical conclusions. 
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