The AICPA Auditing Standards Board (ASB) commented on the exposure draft of the proposed International Standard on Related Services (ISRS) 4400 (Revised), Agreed-Upon Procedures Engagements.
The ASB wrote in a March 15 letter that it supports the International Auditing and Assurance Standards Board’s project to enhance the existing ISRS 4400 because the demand for agreed-upon procedures (AUP) engagements continues to grow. The AUP service may be an effective and efficient service for entities that do not require an audit – especially small and medium sized entities. The clarification, enhancement and modernization of the standard for such engagements will result in the service remaining relevant and the reports providing users with information needed for their purposes.
The letter included a recommendation to provide flexibility when a practitioner is required to obtain the engaging party’s acknowledgement that the procedures are appropriate for the purpose of the engagement. The ASB recommended that the practitioner obtain the acknowledgment at any point prior to the issuance of the practitioner’s report, instead of at the initial point of engagement.
This revision would address a common engagement scenario where the practitioner doesn’t know the procedures to be performed at the initial point of engagement. Also, it would lessen the frequency of the often impractical or cumbersome practice of the practitioner having to obtain numerous amended engagement letters as procedures are revised.