Opinion ID: 1998458
Heading Depth: 1
Heading Rank: 7

Heading: Agreed-upon Procedures.

Text: Finally, the highest and most defined level of an auditor's services are agreed-upon procedures engagements, where a practitioner is engaged by a client to issue a report of findings based on specific procedures performed on subject matter. The client engages the practitioner to assist specified parties in evaluating subject matter or an assertion as a result of a need or needs of the specified parties. Because the specified parties require that findings be independently derived, the services of a practitioner are obtained to perform procedures and report his or her findings. The specified parties and the practitioner agree upon the procedures to be performed by the practitioner that the specified parties believe are appropriate. Because the needs of the specified parties may vary widely, the nature, timing, and extent of the agreed-upon procedures may vary as well; consequently, the specified parties assumed responsibility for the sufficiency of the procedures since they best understand their own needs. In an [agreed-upon procedures] engagement... the practitioner does not perform an examination or a review ... and does not provide an opinion or negative assurance. Instead, the practitioner's report on agreed-upon procedures should be in the form of procedures and findings. [ Id. at AT § 201.08.] Unlike other audit functions, agreed-upon procedures engagements are tailored to identify and examine areas as defined by, and in as much detail as specifically requested by, the client. Due to the limitations of an engagement that requests that the auditor perform an examination or audit report of a corporation's financial statements, requests that an auditor investigate whether financial statements are misstated due to fraud perforce fall squarely within the category of agreed-upon procedures. Because KPMG's liability must be defined by the scope of the engagement it entered into with PCN, the threshold question that must be addressed is what level of auditing services KPMG was engaged by PCN to perform.