We develop and perform agreed-upon procedures to confirm the validity of information outside of the financial statements. We then provide a detailed report affirming our findings. Agreed-upon procedures are used when a third party requires a professional’s review of information unrelated to a company’s financial statements. For example, it may be requested by the purchasing company during a merger or acquisition to validate certain information. Agreed-upon procedures can also assist in the following:
There are several benefits to using agreed-upon procedures. They allow clients to specify exactly what types of services they need, which items to review, and what period to examine. Because they are more targeted and less time-consuming than full audits, these services are less expensive. And although the final report does not provide an opinion, clients do receive very detailed reports outlining the accounting procedures used.
For instance, when companies are obtaining loans, banks often require assurances on receivables and/or inventory to serve as collateral, which can be satisfied through agreed-upon engagements. Another example includes corporate integrity agreements used in the healthcare industry in order to avoid being blocked from participating in federal healthcare programs.
As with financial statement audits and advisory services, it’s important that you choose a firm that understands your business’s specific industry and unique position in the marketplace. At HW&Co., we can provide you with the credibility you need to reassure stakeholders and justify business decisions.