---
title: "What are AUP engagements — and does your business need one?"
date: 2024-07-24
author: "Eric B. Maneval"
featured_image: "https://beachfleischman.com/wp-content/uploads/2024/07/2024-0724-What-are-AUP-engagements_blog.avif"
categories:
  - name: "Assurance"
    url: "/category/assurance.md"
tags:
  - name: "agreed upon procedures"
    url: "/tag/agreed-upon-procedures.md"
  - name: "financial statements"
    url: "/tag/financial-statements.md"
---

# What are AUP engagements — and does your business need one?

## Understanding AUP Engagements

In specific scenarios, businesses might require Certified Public Accountants (CPAs) to conduct **agreed-upon procedures** (AUPs) instead of, or alongside, a review or an audit. According to the [American Institute of Certified Public Accountants](https://www.aicpa-cima.com/) (AICPA), AUPs are a type of attestation engagement where a practitioner performs specific procedures on subject matter and reports the findings without offering an opinion or conclusion.

AUPs are typically more cost-effective and quicker to complete than reviews or audits. Their adaptability also enables them to address both financial and non-financial matters, providing a deeper examination of items reported on your [financial statements](https://beachfleischman.com/assurance/financial-statements-audits-reviews-compilations/).

## The Basics of AUP Engagements

Generally, an AUP engagement involves similar procedures to those used in reviews or audits but on a smaller, more limited scale and without assurance from the CPA. The scope and nature of the procedures are outlined in an engagement letter.

Upon completion, CPAs issue a written report that details the procedures performed and summarizes the findings. According to accounting standards, an AUP report must include:

- A title with the word “independent” to indicate the report is from an independent accountant.
- Identification of the engaging party, the subject, and the responsible party (if different from the engaging party).
- The intended purpose(s) of the engagement.
- A statement clarifying that the practitioner did not conduct an examination or review.
- A statement that the practitioner does not express an opinion or conclusion.
- Any reservations or restrictions concerning procedures or findings.

AUPs can be customized to fit your organization’s needs, offering a focused analysis of key areas in your business operations.

## Real-World Applications of AUPs

AUPs can provide valuable insights into various areas for clients and third parties, such as:

- Internal control evaluations
- Grant compliance
- Franchise agreement compliance
- M&A due diligence
- Construction project progress and spending practices
- Royalty payments under a licensing agreement

Lenders may also require AUPs to confirm a company’s compliance with loan covenants. If a lender waived a loan covenant violation during a year-end review or audit, they might request AUPs to verify key financial metrics midyear as a condition of the waiver.

## How We Can Help

AUPs are among the diverse services CPAs offer. These engagements can serve as a flexible, time-saving alternative or addition to financial statement reviews and audits, though they come with certain limitations. Contact us to determine whether an AUP engagement is suitable for your specific needs.

©2026