Agreed upon procedures focus on what you specifically want to look at. It is an engagement between your company and an accountant to issue a report of findings on specific procedures. This level of service does not have to encompass the entire financial statements. It also works well for testing compliance requirements with regulations, contracts, or internal policies and procedures. Unique to agreed-upon procedures is that you have to draw your own conclusions on the results of the tests to measure effectiveness.
Examples of agreed-upon-procedures engagements include:
a) internal rate of return calculations;
b) review of loan covenants;
c) cost/expense verification for third parties;
d) assurances on trade debtors and inventories that serve as collateral for a loan.