International Standard on Related Services (ISRS 4400) “Engagements to Perform Agreed-Upon Procedures Regarding Financial Information” – engagement to perform agreed-upon procedures regarding financial information (ISRS 4400) is for the auditor to carry out the certain procedures regarding individual financial reporting items (for example, accounts receivable or accounts payable), financial statement (for example, balance sheet) or even a full package of financial reporting.
The subject to agreed-upon procedures can be:
- Reconciliation of mutual settlements with creditors (debtors);
- estimates of sales;
- liquidity calculations;
- assessment of dependence on suppliers (customers);
- evaluating the structure of actual expenses (incomes) and their conformity to the planned ones;
- analysis of fulfilling the conditions of a contract by the Parties;
- analysis of proper use of funds and others.
According to results of agreed-upon procedures the auditor provides a Report of the factual findings of agreed-upon procedures, no assurance is expressed. On the basis of the report users assess for themselves the procedures and findings and draw their own conclusions.
The report is restricted to those parties that have agreed to the procedures to be performed since others, unaware of the reasons for the procedures, may misinterpret the results.