The International Auditing and Assurance Standards Board (IAASB) today released International Standard on Related Services (ISRS) 4400 (Revised), its revised standard for performing agreed-upon procedures engagements.
In an agreed-upon procedures engagement, the practitioner performs the procedures that have been agreed upon by the practitioner and the engaging party, and the practitioner communicates those procedures and the related findings in the agreed-upon procedures report. A wide range of stakeholders use agreed-upon procedures reports for a variety of reasons; for example, regulators, funding bodies, creditors and others ask for agreed-upon procedures reports to support or complement information, such as audited financial statements or loan or grant applications.
“Agreed-upon procedures engagements are widely used in many jurisdictions and the demand for such engagements continues to grow, particularly in relation to the need for increased accountability around funding and grants,” said Tom Seidenstein, IAASB chair. “This revised standard is responsive to such trends, relating to both financial and non-financial subject matters, and the enhancements in the requirements and application material will promote consistency in the interpretation and performance of agreed-upon procedures engagements by practitioners.”
In addition to having been redrafted using the clarity drafting conventions to be consistent with other IAASB International Standards, some of the significant enhancements to ISRS 4400 (Revised), Agreed-Upon Procedures Engagements, include:
- Responding to the needs of stakeholders – Broadening the scope of the standard to meet demand for agreed-upon procedures engagements and introducing requirements and application material to address evolving engagement circumstances, such as the use of a practitioner’s expert in an agreed-upon procedures engagement.
- Providing transparency in the AUP report – Introducing requirements and application material to clarify whether or not the practitioner is required to comply with independence requirements and, if so, the determination and disclosure of the relevant independence requirements.
- Enhancing consistency in the performance of AUP engagements – Clarifying how professional judgment is exercised in an agreed-upon procedures engagement and introducing requirements and application material on engagement acceptance and continuance conditions and documentation.
ISRS 4400 (Revised) will be effective for AUP engagements for which the terms of engagement are agreed on or after January 1, 2022.
The IAASB also released an ISRS 4400 (Revised) Fact Sheet to provide implementation support in relation to the more significant changes to the standard and to help practitioners navigate and apply the revised standard. Please visit the IAASB website.
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