Agreed-Upon Procedure Engagements—Help Shape the IAASB’s Standard

Jasper van den Hout, Christopher Arnold | April 15, 2015 | 1

A previous Gateway discussion, Growing Your Practice: Agreed-Upon Procedures Engagements, highlighted the non-audit services that are available for small and medium-sized practices (SMPs) and how agreed-upon procedure (AUP) engagements have the potential to be an attractive and growing service offering to small- and medium-sized entities (SMEs).

It also drew attention to the International Auditing and Assurance Standards Board (IAASB)’s Strategy for 2015-2019 and related Work Plan for 2015-2016, which includes the revision of International Standard on Related Services (ISRS) 4400, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information, and consideration of more holistic issues involving AUP as one of its new initiatives.

The project is in response to broad calls from SMPs and other stakeholders who have indicated that investors, banks, and other providers of capital often request an entity to have agreed-upon procedures performed by a practitioner, either in lieu of an audit or in order to ensure that specific procedures are performed on key account balances.[1] The IAASB has subsequently established a working group to identify issues with extant ISRS 4400 and to propose a scope for the project.

Issues That May Be Addressed

One of the main objectives of the project is to revise ISRS 4400 in the format of the clarified standards.

The working group will also explore if the scope of ISRS 4400 will be extended to include non-financial information, as the scope of the extant standard is limited to AUP on financial information.[2] However, extant ISRS 4400 also states that the standard “may provide useful guidance for engagements regarding non-financial information, provided the auditor has adequate knowledge of the subject matter in question and reasonable criteria exist on which to base findings.”[3]

In addition, it has been noted that “hybrid engagements,” using a combination of procedures derived from review, compilation, and agreed-upon procedure engagements are being performed in some jurisdictions as a means of meeting the emerging needs of SMEs, among others. Accordingly, the IAASB is exploring these evolving types of engagements to consider whether standard setting or other activities may be appropriate, in light of the IAASB’s existing suite of standards that may be applicable to these services.

Information Gathering

At this information-gathering stage, input from practitioners on the above issues through responses to the questions outlined below would be welcomed.

  1. What types of AUP engagements does your practice typically perform (including AUP engagements on non-financial information)?
  2. What are the common issues with extant ISRS 4400?
  3. Should the scope of ISRS 4400 be expanded to include non-financial information and what are the issues in applying existing ISRS 4400 to non-financial information?
  4. What are your experiences with “hybrid engagements”?

You are invited to share your feedback below, which will also be provided to the project working group for consideration as part of the information session on AUP, scheduled for the June 2015 IAASB meeting.

[1] In some jurisdictions, not all entities are subject to mandatory regulatory audit requirements.

[2] ISRS 4400, paragraph 1

[3] ISRS 4400, paragraph 2


Jasper van den Hout

Principal, International Auditing and Assurance Standards Board

Jasper joined the IAASB in 2013 and has been involved in a number of key projects, including the IAASB’s projects on accounting estimates (ISA 540 (Revised)), group audits (ISA 600 (Revised)) and key audit matters (ISA 701). Prior to joining the IAASB, Jasper worked for KPMG in the Netherlands and Canada. During his tenure at KPMG, Jasper worked on audits of mid-sized and large private companies in various industries. Jasper is both a Canadian (Ontario) and a Dutch qualified accountant. Follow Jasper on LinkedIn See more by Jasper van den Hout

Christopher Arnold


Christopher Arnold is a Director at the International Federation of Accountants (IFAC). He leads activities on contributing to and promoting the development, adoption and implementation of high-quality international standards, including the Member Compliance Program, Intellectual Property and Translations. Christopher is also responsible for IFAC’s SME (small- and medium-sized entities), SMP (small- and medium-sized practices) and research initiatives, which include developing thought leadership, public policy and advocacy. He was previously an Audit Manager for Deloitte and qualified as a professional accountant in a mid-tier accountancy practice in London (now called PKF-Littlejohn LLP). Christopher started his career as a Small Business Policy Adviser at the Association of Chartered Certified Accountants (ACCA).   See more by Christopher Arnold


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Noémi Robert October 7, 2015

The federation of European accountants (FEE) wrote an information paper on one of the biggest use of ISRS 4400 in Europe. You may find it at the following link:


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