Content area
Full text
Late last year, the AICPA issued two Exposure Drafts covering services for agreed-upon procedures engagements. Current professional guidance in this practice area is generally provided by SAS 35 (Special Reports--Applying Agreed-upon Procedures to Specified Elements, Accounts or Items of a Financial Statement). One of the recently issued exposure drafts would supersede SAS 35 with a new Statement on Auditing Standards. The other exposure draft would create a new Statement on Standards for Attestation Engagements. The two exposure drafts are very similar in content and provide expanded guidance in a practice area widely used by accounting and auditing professionals.
The existing guidance on agreed-upon procedures (SAS 35), issued in April 1981, specifies two requirements for this form of engagement: a) the parties involved must have a clear understanding of the procedures to be performed, and b) distribution of the report is to be restricted to the named parties involved in the engagement. If the procedures to be performed cannot be discussed directly with the users of the report, the accountant may either review the procedures with legal counsel or other appropriate representatives, or distribute a draft of the report or a copy of the engagement letter to the parties involved with a request for their comments.
In performing an agreed-upon procedures engagement, the practitioner must adhere to the AICPA general standards and the first standard of fieldwork. The second and third standards of fieldwork and all reporting standards are not applicable to agreed-upon procedures engagements.
The current reporting standards of SAS 35 permit a practitioner to state in the report that he/she has no adjustments to propose, or that if additional procedures or an audit had been performed,...