AGREED-UPON PROCEDURES (“AUP”)

You probably have heard of Due Diligence. Due Diligence is an investigation, review, and analysis carried out to confirm the information or facts which will support the decision whether or not to proceed with or complete a deal.

Refer to our web pages and past write-ups on Due Diligence

In this article, we are going to introduce another exercise known as Agreed-Upon Procedure (“AUP”).

What is Agreed-Upon Procedures (“AUP”)?

AUP is an exercise where the engaging party and the practitioner agree on certain procedures to be performed on a subject matter. Upon completion of the AUP, the practitioner will report on the findings to the intended users.

The subject matters of an AUP can be financial and non-financial. Examples of non-financial subjects are documents, information, compliance with laws and regulations, etc.

Parties of an AUP Engagement

Generally, an AUP engagement will involve 4 parties as stated below:

  1. Engaging party (client) – who determines the procedure or objective
  2. Practitioner – who performs the AUP and reports the findings
  3. Responsible parties – the owner of the subject matters
  4. Intended users – the users of the AUP report (court, client, authorities, etc)

Purpose of Agreed-Upon Procedures (“AUP”)

The main purpose of an AUP is to report findings on subject matters.

The findings can be used as a form of evidence to support certain allegations or basis for decisions or further actions.

Some examples where AUP is performed:

  1. On the inventory of a wine shop to report on the stock control adequacy.
  2. On the purchases of a company to identify unauthorised transactions or breach of duty by the persons-in-charge.
  3. On the reports for claims to verify the information prepared by the claimants.         

Why AUP?

AUP is more flexible as the procedures to be performed are determined by the clients.

Since the scope of work is specific to the clients’ needs, an AUP may be a preferred approach in terms of time and costs effectiveness as compared to other form of investigative services.

Who can perform AUP?

Most of the AUP reports are meant for financial considerations. The practitioners who perform the AUP are usually qualified accountants and corporate consultants.

However, it all depends on the subject matters of the AUP. The persons carrying out the procedures have to be experts in the relevant fields, competent, and able to identify and report the findings to the intended users.

What we can do for you?

Our team of qualified professionals will be able to assist you in AUP and Due Diligence.

Our team has the relevant experience having managed various cases for AUP and Due Diligence covering purposes such as mergers and acquisitions, shareholders’ disputes, suspected breach of duty, and others.  

Contact us to discuss further what option best suits your requirements.

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