Agreed-upon Procedures: The value of ISRS 4400 (Revised)

Agreed-upon procedure (AUP) reports are used by a wide range of stakeholders for a number of different reasons. The demand of AUP engagements could be attributed to in part by the growth in regulations and the increase in accountability for funding and grants.

The ISRS 4400 (revised), Agreed-Upon Procedures Engagements has been updated to keep up with the increasing demand for AUP engagements and to promote consistent interpretation and performance.

ISRS 4400 (Revised), Agreed-Upon Procedures Engagements amendments are intended to:

  • Respond to the needs of the stakeholders, this can be both financial and non-financial subject matters
  • Provide clarity in the AUP report
  • Increase consistency in the performance of AUP engagements

ISRS 4400 (Revised), Agreed-Upon Procedures Engagements will come into effect for any terms of engagements which are agreed on or after 1 January 2022. Areas with significant changes to be aware of are:

  • Scope and Responsibilities
  • Compliance with Independence Requirements
  • Professional Judgement
  • Engagement Acceptance and Continuance
  • Using the Work of a Practitioner’s Expert
  • The AUP Report

Some of the benefits and use of the ISRS 4400 (Revised), Agreed-Upon Procedures Engagements include:

  • Flexibility, as the service can be customised to organisations circumstances
  • AUP report can be used as additional information to the financial statements for internal and external stakeholder
  • Organisations are able to specify the work to be performed to meet the requirements of the intended user

You can find some more information on ISRS 4000 on the ICAEW Assurance Sourcebook here. On page 69, they wrote the following:

Critical considerations

When performing an agreed-upon procedures engagement on historical financial information, practitioners should, as a minimum, comply with International Standards on Related Services (ISRS) 4400 Engagement to Perform Agreed-upon Procedures on Financial Information. ISRS 4400 also provides useful guidance for engagements regarding non-financial information.

ISRS 4400 requires compliance with the applicable requirements of the Code of Ethics for Professional Accountants issued by the IESBA. The ethical principles that apply to agreed-upon procedures engagements are the professional responsibilities for integrity, objectivity, professional competence and due care, confidentiality, professional behaviour and technical standards. Independence is however not a requirement for agreed-upon procedures engagements. The specific terms of an engagement may however require the practitioner to refer to the independence requirements of IESBA’s Code of Ethics for Professional Accountants. Equally, ISQC1 will apply to all services that the practitioner provides under ISRS 4400

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