APS-1(revised)

August 2018

Engagement Standard
Agreed-Upon Procedures Engagements to
Report Factual Findings
Issued by the Board of the New Zealand Institute of Chartered Accountants (NZICA)

Issued 10/92, Amended 02/03 and 07/13, Revised 08/18

 2018 Auditing and Assurance Standards Board (AUASB).

This document is based on ASRS 4400 Agreed-Upon Procedures Engagements to Report Factual Findings
(ASRS 4400), issued by the Australian Auditing and Assurance Standards Board (AUASB), which has been used
with permission. The text, graphics and layout of this publication are protected by Australian copyright law and
the comparable law of other countries. No part of the publication may be reproduced, stored or transmitted in any
form or by any means without the prior written permission of the AUASB except as permitted by law. For
reproduction or publication, permission should be sought in writing from the Technical Director, Australian
Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria, 8007.

Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ). Formed in Australia. Members of CA ANZ
are not liable for the debts and liabilities of CA ANZ.
Contents
PREFACE.............................................................................................................................................. 4
Main Features ....................................................................................................................................... 5
Introduction............................................................................................................................................ 6
Purpose.............................................................................................................................................. 6
Application ......................................................................................................................................... 6
Scope ................................................................................................................................................. 6
Effective Date.................................................................................................................................... 8
Objective ................................................................................................................................................ 8
Definitions .............................................................................................................................................. 8
Requirements........................................................................................................................................ 8
Conduct of an Agreed-Upon Procedures Engagement.............................................................. 8
Ethical Requirements Relating to an Agreed-Upon Procedures Engagement ....................... 8
Acceptance of an Agreed-Upon Procedures Engagement........................................................ 9
Agreeing the Terms of the Agreed-Upon Procedures Engagement ...................................... 10
Planning ........................................................................................................................................... 11
Risk Assessment ............................................................................................................................ 11
Materiality ........................................................................................................................................ 11
Quality Control ................................................................................................................................ 11
Using the Work of Others .............................................................................................................. 12
Documentation................................................................................................................................ 12
Performing the Engagement......................................................................................................... 12
Reporting ......................................................................................................................................... 12
Application and Other Explanatory Material ................................................................................... 14
Ethical Requirements Relating to an Agreed-Upon Procedures Engagement ..................... 14
Acceptance of an Agreed-Upon Procedures Engagement...................................................... 15
Agreeing the Terms of the Agreed-Upon Procedures Engagement ...................................... 17
Planning ........................................................................................................................................... 17
Performing the Engagement......................................................................................................... 18
Reporting ......................................................................................................................................... 18
Appendix 1 .......................................................................................................................................... 20
Differentiating Factors between Agreed-Upon Procedures Engagements and Assurance
Engagements ...................................................................................................................................... 20
Appendix 2 .......................................................................................................................................... 21
Examples of Differences in Scope between an Agreed-Upon Procedures Engagement and
an Assurance Engagement .............................................................................................................. 21
Appendix 3 .......................................................................................................................................... 24
Example of an Engagement Letter for an Agreed-Upon Procedures Engagement................. 24
Appendix 4 .......................................................................................................................................... 27
Example of a Report of Factual Findings in Connection with Accounts Payable ..................... 27
Conformity with International Standards on Related Services .................................................... 30

Compliance with this standard is mandatory in terms of paragraph 130.1(b) of the Code of Ethics. This
standard is to be read in conjunction with the Code of Ethics
 Engagement Standard APS-1(revised)
Agreed Upon Procedures Engagements to Report Factual Findings

PREFACE

Reasons for Issue

The New Zealand Institute of Chartered Accountants (NZICA) regulates New Zealand
resident members of Chartered Accountants Australia and New Zealand (CA ANZ) under the
New Zealand Institute of Chartered Accountants Act 1996 and the terms of the
amalgamation agreement. The maintenance of the professional and ethical standards is an
integral component of the NZICA’s regulatory responsibilities.

NZICA has revised and reissued its existing Statement of Agreed Upon Procedures
Engagement Standards 1 Statement of Agreed Upon Procedures Engagement Standards
(APS-1) to maintain appropriate professional standards for its New Zealand resident
members when conducting engagements to perform agreed upon procedures. Compliance
with this standard is mandatory in terms of paragraph 130.1(b) of the NZICA Code of Ethics.

Currently, the New Zealand Auditing and Assurance Standards Board (NZAuASB), which
develops New Zealand’s auditing and assurance standards, has no mandate for the
development of a standard for agreed-upon procedures engagements. The revision and
reissue of APS-1 by NZICA ensures that an adequate, appropriate professional obligation for
these engagements is in place until such time as the NZAuASB mandate is amended. This
change is now expected to occur in the short term, following the introduction of the
Regulatory Systems (Economic Development) Amendment Bill on 11 July 2018. However
exact timing remains unclear.

In revising APS-1, NZICA has followed the approach of the NZAuASB, whose standard
setting activity adopts the standards of the International Auditing and Assurance Standards
Board (IAASB), modified as necessary to reflect unique New Zealand conditions. Therefore,
this standard has been developed with reference to the relevant international standard ISRS
4400 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information
(ISRS 4400). It has also been developed to conform, where appropriate, to the equivalent
Australian standard ASRS 4400 Agreed-Upon Procedures Engagements to Report Factual
Findings (ASRS 4400), which has been used with the permission of the Australian Auditing
and Assurance Standards Board (AUASB). ASRS 4400 conforms to ISRS 4400 but has
been more recently updated to reflect current best practice. Maintaining consistency with
ASRS 4400 also furthers the trans-Tasman harmonisation obligations of the AUASB and
NZAuASB.

APS-1(revised) is effective for all agreed-upon procedures engagements where a member or

firm is appointed on or after 1 January 2019 with early adoption is permitted. It supercedes
the existing engagement standard APS-1 Statement of Agreed Upon Procedures
Engagement Standards 1 and its accompanying guidance statement APG-1 Guideline on
Performance of An Agreed Upon Procedures Engagements, both of which have been
withdrawn from 1 January 2019.
 Engagement Standard APS-1(revised)
Agreed-Upon Procedures Engagements to Report Factual Findings

Main Features
This Engagement Standard establishes mandatory requirements and provides application
and other explanatory material for members to follow when accepting, undertaking and
reporting on engagements to perform agreed-upon procedures.

This Engagement Standard:

(a) details ethical requirements, including independence, applicable to agreed-upon

procedures engagements;
(b) describes acceptance requirements for agreed-upon procedures engagements;
(c) requires terms of the engagement to be agreed;
(d) requires the member to plan the work;
(e) specifies that the member does not perform a risk assessment and does not apply
materiality;
(f) describes quality control requirements;
(g) describes requirements for using the work of others;
(h) describes the documentation requirements;
(i) requires the procedures to be performed when conducting the engagement to be
limited to those agreed; and
(j) describes the form and content of the report of factual findings.
 APS-1(revised)
Issued 10/92
Amended 02/03
Amended 07/13
Revised 08/18

New Zealand Institute of Chartered Accountants

ENGAGEMENT STANDARD
Agreed-Upon Procedures Engagements to Report Factual Findings
Issued by the Board of the New Zealand Institute of Chartered Accountants (NZICA)

Introduction
Purpose

1. The purpose of this Standard is to establish requirements and provide guidance to be

followed by members when accepting, performing and reporting on an ‘agreed-upon
procedures engagement’.

Application
2. This Standard applies to agreed-upon procedures engagements to be performed by a
member, where factual findings are reported but no conclusion or opinion is expressed
and no assurance is provided by the member. The intended users draw their own
conclusions based on the factual findings reported combined with any other information
they have obtained.
3. Compliance with this Standard is mandatory in terms of paragraph 130.1(b) of the New
Zealand Institute of Chartered Accountants (NZICA) Code of Ethics and failure to
observe its requirements may expose a member to disciplinary action.

Scope

4. An agreed-upon procedures engagement involves the performance of procedures of an

assurance nature from which no conclusion or opinion is expressed by the member, and
no assurance is provided to intended users. Instead only factual findings obtained as a
result of the procedures performed are reported.
5. A member may be asked to perform other types of engagements for which assurance is
also not provided but in contrast to agreed-upon procedures engagements, the
procedures conducted are not primarily of an assurance nature. These engagements are
not dealt with in this Standard and include:
(a) consulting (or advisory) services;
(b) compilation engagements; and
(c) business services, such as accounting and taxation services.
6. The objective of consulting services is the provision of professional advice and
recommendations with respect to the subject matter. The objective of compilation
engagements is the presentation of financial information in a specified form. The
objective of business services is the conduct of accounting procedures, computations or
the provision of business or taxation advice. These engagements are not subject to the
requirements of this Standard.
7. An agreed-upon procedures engagement is not an assurance engagement, 1 even
though similar procedures are performed, because the purpose of the procedures
performed is not to obtain sufficient appropriate evidence on which to base a conclusion.
In contrast, the sufficiency and appropriateness of the evidence obtained in an
assurance engagement is based on the member’s assessment of materiality and the risk
of material misstatement or non-compliance. As the member does not assess materiality
or engagement risk to determine the evidence gathering procedures to be performed in
an agreed-upon procedures engagement, the member is unable to determine whether
the evidence is sufficient and appropriate to reduce risk to an acceptable level as a basis
for a conclusion.
8. This Standard addresses the member’s professional responsibilities to accept agreed-
upon procedures engagements to report factual findings only if:
(a) the member has the capabilities and competence to perform the procedures;
(b) assurance is not deemed to be necessary to meet the needs of intended users of
the member’s report;
(c) the member is not required to determine the sufficiency of the procedures to be
performed;
(d) neither an assurance conclusion nor assurance opinion will be provided on the
findings but the intended users may draw their own conclusions with respect to
the subject matter; and
(e) each of the procedures to be performed is to be clearly specified in the
engagement letter.

9. This Standard deals with the conduct of agreed-upon procedures engagements and
identifies that risk assessment, responding to assessed risks, evaluation of evidence
gathered and expressing a conclusion or opinion are aspects of an assurance
engagement which are not performed when no assurance is to be provided.
10. An agreed-upon procedures engagement may be misunderstood as providing
assurance, as the engagement is performed by a member and involves the conduct of
the same or similar procedures to an assurance engagement. Assurance engagements
are regulated by the New Zealand Auditing and Assurance Standards Board (NZAuASB)
under delegated authority from the External Reporting Board (XRB). In explaining the
nature of assurance engagements, paragraph 20 of EG Au1A Framework for Assurance
Engagements, issued by the NZAuASB, states that ‘a member reporting on an
engagement that is not an assurance engagement within the scope of this Framework
clearly distinguishes that report from an assurance report’. This Standard deals with the
content of a report of factual findings in order to differentiate it from an assurance report.
11. This Standard deals with how the form, content and restrictions on use of a member’s
report of factual findings helps to minimise misinterpretation and promote the intended
users’ understanding of that report.

1 See the NZICA Code of Ethics which defines an ‘assurance engagement’ as ‘an engagement in which a
member expresses a conclusion designed to enhance the degree of confidence of the intended users other than
the responsible party about the outcome of the evaluation or measurement of an underlying subject matter
against criteria.’
Effective Date
12. This standard is effective for all agreed-upon procedures engagements where a member
or firm is appointed on or after 1 January 2019. Early adoption is permitted. It
supercedes the existing engagement standard APS-1 Statement of Agreed Upon
Procedures Engagement Standards 1 and its accompanying guidance statement APG-1
Guideline on Performance of An Agreed Upon Procedures Engagements, both of which
have been withdrawn from 1 January 2019.

Objective
13. The objective of the member in an agreed-upon procedures engagement is to apply their
professional capabilities and competence in carrying out procedures of an assurance
nature, to which the member, the engaging party and any third party intended user (as
applicable) have agreed, and to report factual findings, without providing assurance or
implying that assurance has been provided.

Definitions
14. For the purposes of this Standard, the following terms have the meanings attributed
below:
(a) Engaging party - The party(ies) that engages the member to perform the agreed-
upon procedures engagement.
(b) Intended users - The individual(s) or organisation(s), or groups thereof, identified in
the engagement letter, for whom the member prepares the report of factual findings.
(c) Procedures of an assurance nature - Procedures performed by a member which are
the same or similar to procedures performed in an assurance engagement.

Requirements
Conduct of an Agreed-Upon Procedures Engagement
15. The member shall comply with this Standard and with the terms of the engagement
agreed with the engaging party.

Ethical Requirements Relating to an Agreed-Upon Procedures Engagement

16. When conducting an agreed-upon procedures engagement, the member shall comply
with ethical requirements equivalent to the ethical requirements applicable to ‘Other
Assurance Engagements’ 2.These include the independence requirements that are
applicable for ‘Reports that Include a Restriction on Use and Distribution’ (see NZICA
Code of Ethics paragraphs 291.21-27). Additional modifications to these independence
requirements are permitted, provided the engaging party explicitly agrees to these
modifications in the terms of the engagement. 3 The modified independence

2 The ethical requirements, including independence, applicable to Other Assurance Engagements are covered in
the NZICA Code of Ethics and include section 291 Independence - Other Assurance Engagements. These
requirements align with those in the NZAuASB’s Professional and Ethical Standard 1 (Revised) Code of Ethics
for Assurance Practitioners.
3 See paragraph 24(f) of this Standard
 requirements agreed to in the terms of the engagement, shall be described in the report
of factual findings. 4 (Ref: Para. A1)

Acceptance of an Agreed-Upon Procedures Engagement

17. The member shall obtain an understanding of the needs and objectives of the intended
users, including a group of intended users, of the member’s report of factual findings and
the purpose for which that report will be used. (Ref: Para. A2-A4)
18. A regulator or representative of a group of users, industry or the accounting profession
may specify the agreed-upon procedures to be performed to meet the needs of a group
of intended users. In these circumstances, the member shall be satisfied that the needs
of the group of users for whom the engagement is intended have been appropriately
considered and addressed.
19. Before accepting an agreed-upon procedures engagement, the member shall determine
that the persons who are to perform the engagement collectively have the appropriate
competence and capabilities to perform the procedures.
20. The member shall not accept an agreed-upon procedures engagement if, in the
professional judgement of the member :
(a) the provision of factual findings alone which provide no assurance is unlikely to
meet the needs of the intended users; (Ref: Para. A3) or
(b) the circumstances of the engagement indicate that the intended users are likely
to construe the outcome of the engagement as providing an assurance
conclusion about the subject matter; or
(c) use of the report of factual findings cannot be restricted to the engaging party and
any intended users identified, due to legal requirements or other circumstances;
or
(d) all of the elements of an assurance engagement 5 are met; (Ref: Para. A5-A7) or
(e) the engagement has no rational purpose; or
(f) the circumstances of the engagement indicate that it will be necessary for the
member to do any of the following:
(i) determine the sufficiency of the procedures to be performed; (Ref: Para. A8)
(ii) perform a risk assessment in order to determine the procedures to be
undertaken; (Ref: Para. A9)
(iii) evaluate the findings in order to determine the sufficiency and
appropriateness of the evidence gathered; (Ref: Para. A9) or
(iv) reach a conclusion or form an opinion based on the evidence gathered. (Ref:
Para. A9)
21. In order to establish whether the preconditions of an agreed-upon procedures
engagement are present, the member shall obtain agreement from management, and,
where appropriate, those charged with governance and intended users, that it
acknowledges and understands its responsibility:
(a) for determining the adequacy or otherwise of the procedures agreed to be
performed;
(b) for determining whether the factual findings reported, in combination with any
other information obtained, provide an appropriate basis for any conclusions
which management or the intended users wish to draw on the subject matter;

4 See paragraph 43(f) of this Standard.

5 See paragraph 26 of EG Au1A Framework for Assurance Engagements, issued by the NZAuASB
 (c) to provide the member with:
(i) access to all information of which management is aware that is necessary for
the performance of the procedures agreed;
(ii) additional information that the member may request from management for the
purpose of the engagement; and
(iii) unrestricted access to persons within the entity from whom the member
requires co-operation in order to perform the procedures agreed.

Agreeing the Terms of the Agreed-Upon Procedures Engagement

22. The member shall agree the terms of the agreed-upon procedures engagement with the
engaging party, and intended users who use the report. 6 If the intended users of the
report of factual findings are not signatories to the terms of the engagement, those
intended users shall be identified in the terms of the engagement and all other parties
shall be excluded from using the report. (Ref: Para. A10-A11)
23. The agreed terms of the engagement shall be recorded in an engagement letter or other
suitable form of written agreement and shall include: (Ref: Para. A12-A14)
(a) the objective and scope of the engagement;
(b) confirmation of the member’s acceptance of the appointment;
(c) the nature of the engagement, including a statement that the procedures
performed will not constitute a reasonable or limited assurance engagement and
that accordingly no assurance will be provided;
(d) a statement that intended users are expected to conduct their own assessment of
the findings, combined with other information available to them and, if necessary,
perform further procedures in order to obtain sufficient appropriate evidence on
which to base any conclusion on the subject matter;
(e) the member’s responsibilities to the engaging party and other specified parties;
(f) confirmation that the member will apply ethical requirements equivalent to those
applicable for ‘Reports that Include a Restriction on Use and Distribution’ (see
NZICA Code of Ethics paragraphs 291.21-27) or, if modified independence
requirements have been agreed, the level of independence agreed;
(g) identification of the subject matter to which the procedures will be applied;
(h) the nature, timing and extent of the specific procedures to be performed;
(i) management’s responsibilities;
(j) identification of the intended users of the report including those users who may
not be party to the terms of the engagement, such as a group of users, regulator
or bank;
(k) a statement that the use of the report of factual findings is restricted to the
engaging party, who has agreed to the procedures to be performed, and the
intended users identified; and
(l) reference to the expected form of any reports to be issued by the member, which
may be illustrated by attaching to the engagement letter a draft of the report of
factual findings that will be issued, omitting the factual findings.
24. The nature, timing and extent of procedures shall be specified in the terms of the
engagement in sufficient detail such that the member will not be required, during the

6See Appendix 3 of this Standard for an example of an engagement letter for an agreed-upon procedures
engagement.
 course of the engagement, to exercise professional judgement in determining or
modifying the procedures to be performed. (Ref: Para. A13)
25. When conducting an agreed-upon procedures engagement, if the member is unable to
perform the exact nature, timing or extent of procedures agreed, but alternative
procedures can be performed and the engaging party requires those procedures to be
performed, then new terms of the engagement shall be agreed with the engaging party in
writing. (Ref: Para. A16)

Planning
26. The member shall plan the work so that the engagement will be performed in an effective
manner, in accordance with the terms of the engagement and this Standard.
27. The engagement plan for an agreed-upon procedures engagement shall be restricted to
the nature, timing and extent of procedures agreed in the terms of the engagement. The
plan does not include alternative or further procedures unless agreed with the engaging
party in amended terms of the engagement. (Ref: Para. A15-A16)

Risk Assessment
28. The member does not perform a risk assessment for an agreed-upon procedures
engagement, as the nature, timing and extent of procedures to be performed are agreed
with the engaging party rather than determined by the member in response to assessed
risks.

Materiality
29. The member does not apply materiality to designing the procedures to be performed nor
to assessing the factual findings to determine whether the subject matter information is
free from material misstatement or non-compliance, as this is the responsibility of the
intended users.

Quality Control

30. The member shall take responsibility for the overall quality of the agreed-upon
procedures engagement and shall apply quality control procedures at both the firm and
engagement level as set out in NZICA Professional Standard 1 Quality Control (PS-1).

31. Throughout the engagement the member shall remain alert through observation and
making enquiries as necessary, for evidence of non-compliance with relevant ethical
requirements including independence by members of the engagement team. If matters
come to the members attention that indicate that members of the engagement team
have not complied with the relevant ethical requirements the member shall determine the
appropriate action

32. The member shall be satisfied that the engagement team, 7 and any experts engaged
who are not part of the engagement team, collectively have the appropriate competence,

7 ‘Engagement team’ as defined by paragraph 15 of PS-1 Quality Control means all partners and staff performing

the engagement and any individuals engaged by the firm or network form who perform procedures on the
engagement. This excludes external experts engaged by the firm or network firm.
 capabilities and resources to perform the agreed-upon procedures in accordance with
this Standard.

Using the Work of Others

33. The member shall take responsibility for the direction, supervision and performance of
the engagement and the accurate reporting of factual findings.
34. When the member uses the work of another member, an internal auditor or an expert,
the member shall evaluate the adequacy of their work, including their objectivity and
technical competence in conducting the procedures, whether the nature, timing and
extent of procedures conducted agrees with procedures in the terms of the engagement
and whether the factual findings communicated detail adequately the result of the
procedures conducted.

Documentation

35. The member shall document:

(a) issues identified with respect to compliance with relevant ethical requirements
and how they were resolved;
(b) conclusions on compliance with independence requirements equivalent to those
for ‘Reports that Include a Restriction on Use and Distribution’ (see NZICA Code
of Ethics paragraphs 291.21–27) or modified independence agreed;
(c) conclusions reached regarding the acceptance and continuance of client
relationships and acceptance of the agreed-upon procedures engagement;
(d) the nature, timing and extent of procedures performed and the factual findings
obtained, as identified in the agreed-upon procedures report; and
(e) evidence that the engagement was carried out in accordance with this Standard
and the terms of the engagement.

Performing the Engagement

36. As no assurance is to be provided, the member shall carry out only the procedures
agreed in the terms of the engagement and use the results of the procedures to provide
a report of factual findings. (Ref: Para. A17-A18)
37. If the engaging party’s requirements alter during the course of the engagement which
require the member to draw conclusions from the findings, the terms of the agreed-upon
procedures engagement cannot be extended to the provision of assurance. However, a
new engagement may be agreed for the provision of assurance, if appropriate, to be
conducted in accordance with applicable auditing, review or other assurance
engagement standards issued by the NZAuASB.

Reporting
38. The member shall provide a report of factual findings for the agreed-upon procedures
engagement. In contrast to an assurance report, a report of factual findings does not
include an evaluation of those findings in order to draw a conclusion or form an opinion.
(Ref: Para. A19)
39. The member shall not express a conclusion or opinion in an agreed-upon procedures
engagement as the member has not performed a risk assessment, responded to
assessed risks by determining the procedures to be performed or assessed whether
 sufficient appropriate evidence has been obtained as a reasonable basis for expressing
a conclusion.
40. If the member is undertaking an agreed-upon procedures engagement in parallel with an
assurance engagement, the factual findings from the agreed-upon procedures
engagement shall be presented separately from the report on the assurance
engagement.
41. Use of the report shall be restricted to those parties that have either agreed to the
procedures to be performed or have been specifically included as intended users in the
engagement letter since others, unaware of the reasons for the procedures, may
misinterpret the results.
42. The report of factual findings for an agreed-upon procedures engagement shall contain:
(Ref: Para. A20-A21)
(a) a title;
(b) an addressee (ordinarily the engaging party);
(c) identification of the specific information to which the procedures have been
applied;
(d) a statement that the procedures performed were those agreed with the engaging
party;
(e) a statement that the engagement was performed in accordance with APS-1
(revised);
(f) a statement that either ethical requirements equivalent to those applicable for
‘Reports that Include a Restriction on Use and Distribution’ (see NZICA Code of
Ethics paragraphs 291.21-27) have been complied with, including independence,
or, if modified independence requirements have been agreed in the terms of the
engagement, a description of the level of independence applied;
(g) identification of the purpose for which the agreed-upon procedures engagement
was performed;
(h) a statement that the responsibility for determining the adequacy or otherwise of
the procedures agreed to be performed by the member is that of the engaging
party;
(i) a listing of the specific procedures performed, detailing the nature, timing and
extent of each procedure;
(j) a description of the member’s factual findings in relation to each procedure
performed, including sufficient details of errors and exceptions found;
(k) identification of any of the procedures agreed in the terms of the engagement
which could not be performed and why that has arisen;
(l) a statement that the procedures performed do not constitute either a reasonable
or limited assurance engagement and, as such, no assurance is provided;
(m) a statement that had the member performed additional procedures, a reasonable
assurance engagement or a limited assurance engagement, other matters might
have come to the member’s attention which would have been reported;
(n) a statement that use of the report is restricted to those parties identified in the
report, who have agreed to the procedures to be performed or were identified in
the terms of the engagement;
(o) a statement (when applicable) that the report relates only to the elements,
accounts, items or financial and non-financial information specified and that it
does not extend to the entity’s financial statements, or other specified report,
taken as a whole;
 (p) the date of the report;
(q) the member’s address; and
(r) the member’s signature.
43. If the member is required by law or regulation to use a specific layout or wording for the
report of factual findings, the report of factual findings shall refer to this Standard only if
the member’s report includes, at a minimum, each of the elements in paragraph 42.
44. Law or regulation of the relevant jurisdiction may prescribe the layout or wording of the
report of factual findings in a form or in terms which are significantly different from the
requirements of this Standard. In these circumstances, the member shall evaluate:
(a) whether intended users might misunderstand the factual findings reported and the
fact that no assurance is provided; and, if so;
(b) whether additional explanation in the report of factual findings can mitigate possible
misunderstanding.
If the member considers that additional explanation in the report of factual findings
cannot mitigate possible misunderstanding, the member shall not accept the
engagement unless required by law or regulation to do so. As an agreed-upon
procedures engagement conducted in accordance with such law or regulation does not
comply with this Standard, the member shall not include any reference in the report of
factual findings to the engagement having been conducted in accordance with APS-1
(revised). (Ref: Para. A22)
45. The member shall not issue modifications or an emphasis of matter in a report of factual
findings, as no conclusion or opinion is expressed. Nevertheless, the following matters, if
applicable, are reported as part of the factual findings:
(a) errors or exceptions identified as a result of the procedures performed, regardless
of whether they were subsequently rectified by the entity; (Ref: Para. A23) and
(b) the inability of the member to perform any of the agreed-upon procedures. (Ref:
Para. A24)
46. The report of factual findings for an agreed-upon procedures engagement shall be
clearly distinguished from an assurance report in that it shall not contain:
(a) a statement of compliance with standards issued by the NZAuASB;
(b) inappropriate use of the terms ‘assurance’, ‘audit’, ‘review’, ‘opinion’ or ‘conclusion’;
or
(c) any statement that could reasonably be mistaken for a conclusion designed to
enhance the degree of confidence of intended users about the outcome of the
evaluation or measurement of a subject matter against criteria.

Application and Other Explanatory Material

Ethical Requirements Relating to an Agreed-Upon Procedures Engagement
(Ref: Para. 16)

A1 Ethical requirements applicable to ‘Other Assurance Engagements’, permit the

independence requirements to be modified if the intended users of the member’s
report are knowledgeable as to the purpose, subject matter information and limitations
of the report and explicitly agree to the application of the modified independence
requirements. 8 In these circumstances, the report is to include a restriction on use to

8 See paragraphs 291.21-27.1 of the NZICA Code of Ethics

 the intended users only. Since a ‘restriction of use’ statement must be included in the
report of factual findings 9 issued under this Standard, the independence requirements
in paragraphs 291.25-27.1 of the NZICA Coe of Ethics are applicable if the other
preconditions about the users referred to above are met. These requirements do not
include the independence requirements in paragraphs 291.100-159 of the NZICA
Code of Ethics that are applicable to engagements for public interest entities. If further
modifications are permitted by users and adopted in the terms of the engagement, but
the intended users include a group of users who are not party to the terms of the
engagement, they must be made aware of the modified independence requirements,
such as by reference to them in the report of factual findings. In any case, the
independence of the member and the engagement team will need to be assessed. An
assessment of any material financial interests between the engaging party and the
member’s firm, and of any threats to independence posed by network firm interests or
relationships will also be required also be required (see NZICA Code of Ethics
paragraphs 291.26-27).

Acceptance of an Agreed-Upon Procedures Engagement (Ref: Para. 17-21)

A2 The member needs to understand the engaging party’s objectives in engaging the
member to ensure that an engagement is agreed which is appropriate to those
objectives and to avoid any misunderstandings with respect to the scope of the
engagement.

A3 If the intended users are not a signatory to the terms of engagement, the member can
fulfil the requirement in paragraph 17 by:
(a) Distributing a copy of the anticipated terms of engagement, including a draft
of the anticipated agreed-upon procedures engagement report, to the
intended user(s); (Ref: Para. A10)
(b) Comparing the procedures to be performed with written requirements set out,
for example, in law or regulation, or in a contractual agreement (sometimes
referred to as the “Terms of Reference”) where appropriate;
(c) Discussing the procedures to be performed with appropriate representatives
of the intended user(s); or
(d) Reviewing correspondence between the engaging party and the intended
user(s) if the engaging party is not the intended user.

A4 In determining whether a report of factual findings is likely to meet the needs of

intended users, or group of intended users, of the report, the member considers the
purpose for which users intend to use the report. In doing so, the member does not
take responsibility for the sufficiency of the agreed-upon procedures to be performed
to meet the needs of intended users. If intended users are likely to be able to interpret
the factual findings resulting from procedures performed, whether alone or in
combination with other available evidence, to reach appropriate conclusions, then an
engagement to report factual findings may be acceptable. If intended users are
unlikely to be able to interpret the factual findings to reach appropriate conclusions,
then the member does not accept an agreed-upon procedures engagement, but may
accept an assurance engagement if appropriate.

9 See paragraphs 42 and 43(n) of this Standard

A5 An agreed-upon procedures engagement may be accepted if it satisfies some but not
all of the elements of an assurance engagement, 10 with the exception of a written
assurance report, as that requires the provision of assurance.

A6 If all of the elements of an assurance engagement are met, 11 the member declines an
agreed-upon procedures engagement, however an assurance engagement may be
accepted if appropriate and applicable auditing, review or other assurance
engagement standards issued by the NZAuASB are applied. Appendix 1 provides a
table of Differentiating Factors between Agreed-Upon Procedures Engagements and
Assurance Engagements to assist the member in determining whether the
engagement is an agreed-upon procedures engagement or an assurance
engagement.
A7 The extent of the subject matter does not affect whether an engagement is an
assurance engagement or not. Even if the subject matter of an engagement is very
specific, when the engagement contains the elements of an assurance engagement,
the member complies with the requirements of either:
(a) ISA (NZ) 805 (Revised), Special Considerations - Audits of Single Financial
Statements and Specific Elements, Accounts or Items of a Financial Statement
when providing reasonable assurance on historical financial information other
than a complete set of financial statements; or
(b) ISAE (NZ) 3000 (Revised), Assurance Engagements Other than Audits or
Reviews of Historical Financial Information when providing reasonable or limited
assurance on matters other than historical financial information. 12
Example engagements are described in Appendix 2 illustrating how an engagement
could be scoped as an agreed-upon procedures engagement or an assurance
engagement for the same subject matter.
A8 The member may assist the engaging party and intended users in determining the
procedures to be performed to ensure that the procedures are able to be performed
and are likely to meet the needs of the intended users. Nevertheless, the member is
not responsible for the adequacy of the agreed-upon procedures nor for assessing
whether the findings will be sufficient either alone or in combination with other
evidence to support any conclusions which the users intend to draw. The member’s
role in an agreed-upon procedures engagement is to use their professional
competence and capabilities in the performance of the agreed-upon procedures and to
report the findings accurately.
A9 If it is necessary for the member to perform a risk assessment, respond to assessed
risks or evaluate the evidence gathered, then this indicates that the member is using
their professional judgement to gather sufficient appropriate evidence to support a
conclusion. In these circumstances, the engagement may be an assurance
engagement and, if so, the relevant requirements in the auditing, review or other
assurance engagement standards issued by the NZAuASB need to be applied.

10 For the elements of an assurance engagement, see paragraph 26 of EG Au1A, issued by the NZAuASB.
11 For the elements of an assurance engagement, see paragraph 26 of EG Au1A, issued by the NZAuASB.
12 See SAE 3100, Compliance Engagements, and SAE 3150, Assurance Engagements on Controls, as

appropriate. Both are issued by the NZAuASB.

Agreeing the Terms of the Agreed-Upon Procedures Engagement (Ref: Para.
22-25)

A10 The agreed terms would ordinarily be recorded in an engagement letter or other
suitable form of written agreement. It is in the interests of both the engaging party and
the member that the terms of the engagement are agreed, in writing, by both, to help in
avoiding misunderstandings with respect to the engagement. It is also preferable to
complete this documentation of the terms of the engagement before the engagement
commences.
A11 In certain circumstances, for example when the procedures have been agreed to
between the regulator, industry representatives and representatives of the accounting
profession, the member may not be able to discuss the procedures with all the
intended users who will use the report of factual findings. In such cases, the member
may consider, for example, discussing the procedures to be applied with appropriate
representatives of the intended users, reviewing relevant correspondence from such
users or sending them a draft of the report of factual findings that will be issued.
A12 In an agreed-upon procedures engagement, as the member does not express a
conclusion, it is the engaging party’s responsibility to determine the procedures which
will provide sufficient appropriate evidence to support their own or intended users’
conclusions. It is only appropriate for the member to select the procedures if they will
be assessing the evidence to support a conclusion provided in an assurance
engagement.
A13 Not all intended users may be available to agree to the terms of the engagement or the
agreed-upon procedures to be performed. These intended users may still be specified
in the letter of engagement where the member is satisfied that those users will
understand the purpose for which the report of factual findings is intended to be used.
These intended users may include:
(a) regulators or industry bodies which issue requirements for procedures to be
performed and factual findings to be reported; and
(b) an identifiable group of users which are intended to receive the report of factual
findings for a specified purpose.
A14 An example of an engagement letter for an agreed-upon procedures engagement is
set out in Appendix 3.

Planning (Ref: Para. 26-27)

A15 Planning in an agreed-upon procedures engagement is restricted by the nature, timing
and extent of procedures as agreed in the terms of the engagement. Therefore, the
member does not have the discretion to perform alternative or additional procedures
without obtaining the engaging party’s agreement. Nevertheless, the member will still
need to plan the nature, timing and extent of the resources necessary to perform the
engagement.
A16 In some cases agreeing the terms of engagement and performing the agreed-upon
procedures takes place in a linear and discrete manner. In other cases, this process is
iterative and changes as the new information comes to light during the performance of
the engagement. If procedures that have been previously agreed upon need to be
modified, paragraph 25 requires the member to agree new terms of engagement with
the engaging party in writing. The amended terms of engagement may, for example,
take the form of an updated engagement letter or an addendum to an existing
engagement letter.
Performing the Engagement (Ref: Para. 36-37)
A17 The procedures applied in an engagement to perform agreed-upon procedures may
include:
(a) inspection;
(b) observation;
(c) external confirmation;
(d) re-calculation;
(e) re-performance;
(f) analytical review procedures, where those procedures are based solely on
comparison against expectations defined in the terms of the engagement; and
(g) enquiry.
A18 Analytical procedures are not performed in an agreed-upon procedures engagement
unless the engaging party provides an expectation of recorded amounts or ratios on
which the member may base the analytical procedures. The engaging party’s
expectations are defined in the procedures described in the terms of the engagement.
It is necessary for the engaging party to provide the expectations as a basis for the
analytical procedures so that the member does not use their professional judgement to
develop expectations, which is only appropriate when conducting an assurance
engagement. The member does not interpret the findings from the analytical
procedures but simply presents the findings against the expectations provided by the
engaging party.

Reporting (Ref: Para. 38-46)

A19 Even though assurance is not provided by the member, the intended users are entitled
to rely on the accuracy of the reported findings by virtue of the member’s capabilities
and competence in conducting the agreed-upon procedures.
A20 The report of factual findings describes the procedures performed and findings in
sufficient detail to enable the intended users to understand the nature, timing and
extent of the work performed as well as the nature of the errors and exceptions
identified in order to assess the findings reported and draw their own conclusions on
the subject matter. In order to draw conclusions, intended users may need to assess
the factual findings along with information from other sources. Intended users will need
to satisfy themselves that the evidence, which the report of factual findings and other
sources provide, is sufficient and appropriate to provide a basis for any conclusion
which they may reach.
A21 An illustrative report of factual findings, incorporating the elements set forth in
paragraph 42, is set out in Appendix 4.
A22 If law or regulation prescribes the layout or wording of the member’s report in a form or
in terms that are significantly different from the requirements of this Standard and an
additional explanation cannot mitigate possible misunderstanding, in addition to
excluding any reference to this Standard in the report, the member may consider
including a statement that the agreed-upon procedures engagement is not conducted
in accordance with this Standard.
A23 If the member is aware that an error or exception identified has been substantially
rectified, the fact that it has been rectified may be included in the report.
A24 The member’s inability to perform the agreed-upon procedures may arise from:
(a) circumstances beyond the control of the engaging party;
(b) circumstances relating to the nature or timing of the member’s work; or
(c) limitations imposed by management of the engaging party.
Appendix 1
Differentiating Factors between Agreed-Upon Procedures
Engagements and Assurance Engagements
(Ref: Para. A6)

Agreed-Upon Procedures
Differentiating Factor Assurance Engagement
Engagement
Nature, timing and extent of
Engaging party Assurance practitioner
procedures the responsibility of:
Nature, timing and extent of
Terms of the engagement Engagement plan
procedures determined in:
Changes to the nature, timing
and extent of procedures are Terms of the engagement Engagement plan
documented in:
Professional judgement may
be exercised in assisting the
engaging party to identify
Extent of member’s professional Professional judgement
procedures when agreeing the
judgement exercised in exercised in selecting
terms of the engagement, but
selecting procedures: procedures
only professional competence
is exercised when conducting
the agreed-upon procedures
Sufficiency and appropriateness
Intended user Assurance practitioner
of evidence assessed by:
Factual findings, no conclusion Conclusion providing
Form and content of report:
or assurance provided assurance
Detail of the exact nature,
Reporting of procedures timing and extent of all
Summary of work performed
performed: procedures performed are
reported
No detail of findings, unless a
Detail of exact findings
modified report is to be issued
resulting from each procedure
when the basis for modification
Reporting of findings: performed, including errors
is provided or if a management
and exceptions identified, even
letter is provided in addition to
if rectified
the assurance report
Appendix 2
Examples of Differences in Scope between an Agreed-
Upon Procedures Engagement and an Assurance
Engagement
(Ref: Para. A7)

The following brief descriptions of engagements are intended to illustrate that engagements
relating to the same subject matter may be scoped in the terms of the engagement as an
agreed-upon procedures engagement providing no assurance or an assurance engagement
depending on the needs of the engaging party and intended users. The scope provided in
each of the following examples, which would be reflected in the terms of the engagement, is
to be used as a guide only and will need to be adapted to the individual engagement
requirements and circumstances.

Scope of an
Scope of an
Nature of Purpose of Agreed-Upon
Assurance
Engagement Engagement Procedures
Engagement
Engagement
• Agree gross Audit/review
turnover to compliance with the
underlying data; turnover lease
To assist parties to a
• Recalculate agreement to provide a
lease agreement
adjusted turnover reasonable/limited
1. Turnover lease based on turnover in
based on agreed assurance conclusion
agreement assessing
formula; and as to whether the entity
compliance with the
agreement. • Recalculate the has complied, in all
turnover rent material respects, with
payable under the the lease agreement
lease agreement. over the period.
Audit/review
compliance with the
• Agree specified data reporting requirements
To assist the
from entities’ income of the management
directors of each
statements to the agreement to provide a
entity to fulfil their
entities’ trial reasonable/limited
2. Management reporting
balances, parent assurance conclusion
agreement requirements under
entity consolidation as to whether each
management
schedule and entity has complied, in
agreements with the
audited consolidated all material respects,
managing entity.
financial report. with the management
agreement over the
period.
• Agree start date and
To assist Audit/review employee
employment terms
management leave provisions to
for a random sample
assessment of provide a
of X staff to
whether leave reasonable/limited
employment
provisions were assurance conclusion
contracts.
3. Leave provisions calculated in as to whether leave
• Agree leave taken to
accordance with balances are
employee records.
corporate policy as a calculated, in all
basis for negotiating • Recalculate long material respects, in
the consideration for service leave and accordance with
transferring staff. annual leave corporate policy.
provisions for X staff
 to be transferred as
part of a novation
agreement.
• Select X loans
based on criteria
Audit/review the loan
provided by the
To assist the pool to provide a
engaging party.
engaging party and reasonable/limited
• Agree specified loan
potential investors in assurance conclusion
4. Loan data to supporting
determining the data as to whether the loan
securitisation documentation and
on which to base the pool is reported, in all
check loan data
securitisation of a material respects, in
against given
pool of loans. accordance with the
criteria.
agreed basis.
• Recalculate total
loan pool data.
• Attend X sites
randomly selected,
test count X
randomly selected Audit/review stock at
stock items to stock period end to provide a
count sheets. reasonable/limited
To assist
• Trace those stock assurance conclusion
5. Stocktake management in
count sheets to as to whether stock is
procedures determining the value
summary stock valued fairly, in all
of stock on hand.
data. material respects, in
• Agree X randomly accordance with
selected stock items corporate policy.
to inventory account
and agree cost to
supplier invoices.
• Agree aged debtors
to the trial balance
at period end.
• Agree the largest (at
period end) X
debtors to sales
invoices.
Audit/review debtors
• Trace X randomly
and provision for
selected debtor
doubtful debts to
balances to
provide a
subsequent
reasonable/limited
receipts.
To assist assurance conclusion
• Itemise bad debt
6. Debtors’ management in as to whether debtors
written off for the
balances identifying issues in and provision for
period with
debtors’ collection. doubtful debts are
explanations
presented fairly, in all
provided by
material respects, in
management.
accordance with the
• Itemise customers agreed basis of
on stop supply or accounting.
COD.
• Determine value
and number of credit
notes for the period.
• Calculate debtors
ageing percentages
at period end.
 • Agree list of users
with access to
restricted data for
any part of the
reporting period to
signed
confidentiality
To assist client in Audit/review controls in
statements.
completing their place to comply with
• Agree individual
certificate of confidentiality and
confidentiality
compliance with privacy agreements in
statements to
respect to order to provide a
confidentiality
confidentiality and reasonable/limited
7. Controls to meet agreement.
privacy agreements, assurance conclusion
contractual • Identify
in circumstances as to whether the
obligations confidentiality
where data supplied description fairly
training held over
by providers under presents the controls,
reporting period,
confidentiality and the controls are suitably
percentage of users
privacy agreements designed and operating
attended and
requiring controls to effectively throughout
average hours
protect data. the reporting period.
training attended per
user.
• Trace data access
log for X days,
spread throughout
the period, to list of
approved users.
Appendix 3
Example of an Engagement Letter for an Agreed-Upon
Procedures Engagement
(Ref: Para. A14)
The following is an example of an engagement letter for an agreed-upon procedures
engagement prepared in accordance with APS-1 (revised). This letter is not authoritative but
is intended only to be a guide that may be used in conjunction with the considerations
outlined in this Standard. It will need to be varied according to individual requirements and
circumstances of each engagement. It may be appropriate to seek legal advice that any
proposed letter is suitable.
***
To the appropriate representative of management or those charged with governance 13 of
name of Entity [and name of other intended users or group of users as appropriate]:
[The objective and scope of the engagement]
You have requested that we perform the agreed-upon procedures specified below [as
required by [name of representative of group of intended users or regulator] to meet the
needs of [group of intended users]]. We are pleased to confirm our acceptance and
understanding of this agreed-upon procedures engagement and the nature and limitations of
the procedures we will conduct. Our engagement will be conducted with the objective of
reporting factual findings resulting from each procedure for the purpose of [specify purpose].
The procedures performed will not constitute a reasonable or limited assurance
engagement, accordingly, no assurance will be provided.
[The responsibilities of the member]
We will conduct our engagement in accordance with the New Zealand Institute of Chartered
Accountants Engagement Standard APS-1 (revised) Agreed-Upon Procedures
Engagements to Report Factual Findings. That standard requires that we comply with ethical
requirements equivalent to Other Assurance Engagements, 14 [including independence,
except with respect to independence for which modified independence requirements will be
applied], and plan and perform the agreed procedures to obtain factual findings. [If
applicable: We will apply modified independence requirements 15 agreed with you, which will
consist of (describe level of independence to be applied).] The procedures which we will
perform will be restricted to those procedures agreed with you [which include procedures
required by [name of representative of group of intended users or regulator]] and listed
below. Information acquired by us in the course of our engagement is subject to strict
confidentiality requirements and will not be disclosed by us to other parties except as
required or allowed for by law or professional standards, or with your express consent.
We have agreed to perform the following procedures and report to you the factual findings
resulting from our work:

13 ‘Those charged with governance’ means the person(s) or organisation(s) (for example a corporate trustee) with
responsibility for overseeing the strategic direction of the entity. This includes overseeing the financial reporting
process. For some entities, those charged with governance may include management personnel, for example,
executive members of a governance board of a private or public sector entity, or an owner-manager.
14 See section 291 of the NZICA Code of Ethics
15 See paragraph 291.21 of the NZICA Code of Ethics. Modified independence requirements are only permitted

under the ethical requirements applicable to Other Assurance Engagements if the intended users of the report (a)
are knowledgeable as to the purpose, subject matter information and limitations of the report and (b) explicitly
agree to the application of the modified independence requirements.
[describe the nature, timing and extent of each procedure to be performed, including specific
reference, where applicable, to the identity of documents and records to be read, individuals
to be contacted and parties from whom confirmations will be obtained.]
If we are unable to perform the exact nature, timing or extent of procedures agreed above
but alternative procedures are available, we will only perform these alternative procedures if
modified terms of the engagement are agreed with [name of entity and other intended
users].
[The responsibilities of management or those charged with governance and intended users
(if appropriate)]
Our agreed-upon procedures will be performed on the basis that [management and, where
appropriate, those charged with governance and intended users] acknowledge and
understand that:
(a) they have responsibility for determining the adequacy or otherwise of the procedures
agreed to be performed by us;
(b) they have responsibility for determining whether the factual findings provided by us, in
combination with any other information obtained, provide a reasonable basis for any
conclusions which you or the intended users wish to draw on the subject matter;
(c) they have responsibility to provide us with:
(i) access to all information of which management is aware that is necessary for the
performance of the procedures agreed;
(ii) additional information that we may request from you for the purpose of the
engagement; and
(iii) unrestricted access to persons within the entity from whom we require co-operation
in order to perform the procedures agreed.
(d) the procedures we will perform are solely to assist you [and name of intended users] in
[state purpose]. Our report of factual findings is not to be used for any other purpose
and is solely for your [and name of intended users] information.
(e) the procedures that we will perform will not constitute a reasonable or limited assurance
engagement in accordance with auditing, review or other assurance engagement
standards issued by the New Zealand Auditing and Assurance Standards Board and,
consequently, no assurance will be provided.
We look forward to full co-operation with your staff during our engagement.
[Other relevant information]
[Insert other information, such as fee arrangements, billings and other specific terms as
appropriate]
[Reporting]
Our report of factual findings will consist of a detailed listing of the procedures performed
and our findings in relation to each procedure, including any errors or exceptions identified
regardless of whether those errors or exceptions have since been rectified. Use of our report
will be restricted to you [and [name of other intended users or group of users]] and all other
parties will be excluded from using the report.
Please sign and return the attached copy of this letter to indicate your acknowledgement of,
and agreement with, the arrangements for our agreed-upon procedures engagement
including the specific procedures which we have agreed will be performed and our
respective responsibilities.
Yours faithfully,
............................
Partner
XYZ & Co

Acknowledged on behalf of [name of Entity] by

(signed)
..........................
Name and Title
Date
[Acknowledged on behalf of [name of Intended User] by
(signed)
..........................
Name and Title
Date]
Appendix 4
Example of a Report of Factual Findings in Connection
with Accounts Payable
(Ref: Para. A21)
REPORT OF FACTUAL FINDINGS
To [appropriate addressee]
Report of Factual Findings
We have performed the procedures agreed with you and [name of any intended users party
to the terms of the engagement] to report factual findings for the purpose of assisting you
[and [name of other intended users or group of intended users]] in assessing, in combination
with other information obtained by you, the accuracy of accounts payable as at [date]. The
procedures performed are detailed in the terms of the engagement of [date] and described
below [(or if appropriate) set forth in the attached schedules] 16 with respect to the accounts
payable of [entity] as of [date].
[Management / Those Charged with Governance]’s Responsibility for the Procedures
Agreed
[Management / Those Charged with Governance and any intended users’ party to the terms
of the engagement] are responsible for the adequacy or otherwise of the procedures agreed
to be performed by us. You and [name of other intended users or group of intended users]
are responsible for determining whether the factual findings provided by us, in combination
with any other information obtained, provide a reasonable basis for any conclusions which
you or other intended users wish to draw on the subject matter.
Member’s Responsibility
Our responsibility is to report factual findings obtained from conducting the procedures
agreed. We conducted the engagement in accordance with the New Zealand Institute of
Chartered Accountants Engagement Standard APS-1 (revised) Agreed-Upon Procedures
Engagements to Report Factual Findings. We have complied with ethical requirements
equivalent to those applicable to Other Assurance Engagements, 17 [including independence/
except that we applied modified independence requirements as agreed with you in the terms
of the engagement consisting of (describe level of independence applied)].
Because the agreed-upon procedures do not constitute either a reasonable or limited
assurance engagement in accordance with auditing, review or other assurance engagement
standards issued by the New Zealand Auditing and Assurance Standards Board
(NZAuASB), we do not express any conclusion and provide no assurance on the accounts
payable of [entity] as of [date]. Had we performed additional procedures or had we
performed an audit or a review of the accounts payable in accordance with auditing, review
or other assurance engagement standards issued by the NZAuASB, other matters might
have come to our attention that would have been reported to you.
Factual Findings 18
The procedures were performed solely to assist you in evaluating the accuracy of the
accounts payable. The procedures performed and the factual findings obtained are as
follows:

16 If schedules are attached, describe and reference the schedules (not shown in this example).
17 See section 291 of the NZICA Code of Ethics.
18 The member may choose instead to present the table of factual findings as an attachment to the report,

particularly if it is lengthy.
 Errors or Exceptions
Procedures Performed Factual Findings
Identified

1. We obtained and checked We found the addition to be None

the addition of the trial correct and the total amount to
balance of accounts payable be in agreement.
as at [date] prepared by
[entity], and we compared
the total to the balance in the
related general ledger
account.

2. We compared the attached We found the amounts [Detail the exceptions]

schedule (not shown in this compared to be in agreement,
example) provided by [entity] except for the exceptions
of major suppliers and the noted.
amounts owing at [date] to
each of the related names
and amounts in the trial
balance.

3. For X suppliers randomly We found there were None

selected from the attached suppliers’ statements for all
schedule we obtained such suppliers.
suppliers‟ statements or
requested suppliers to
confirm balances owing at
[date].

4. We compared such We found the amounts agreed, [Detail exceptions]

statements or confirmations or with respect to amounts
to the amounts referred to in which did not agree, we found
2. For amounts which did not [entity] had prepared
agree, we obtained reconciliations and that the
reconciliations from [entity]. credit notes, invoices and
For reconciliations obtained, payments over $XXX as
we identified and listed agreed to reconciling items
outstanding invoices, credit unless exceptions noted.
notes and payments, each of
which was greater than
$XXX. We agreed
outstanding invoices over
$XXX for suppliers selected
to accounts payable for the
subsequent period, invoices
subsequently received and
either credit notes or
payment made.

[The following procedures included in the terms of the engagement could not be performed
for the reasons set out below:] 19

19Insert this table where there has been a limitation of scope such that certain procedures could not be
performed.
 [Reasons Procedure was Unable to be
[Procedure Unable to be Performed]
Performed]

[Detail procedure in terms of the

[Detail reasons]
engagement]

Restriction on Use of Report

This report is intended solely for the use of [entity] and [intended users identified in the terms
of the engagement] for the purpose set out above. As the intended user of our report, it is for
you and other intended users to assess both the procedures and our factual findings to
determine whether they provide, in combination with any other information you have
obtained, a reasonable basis for any conclusions which you wish to draw on the subject
matter. As required by APS-1, use of this report is restricted to those parties that have
agreed the procedures to be performed with us and other intended users identified in the
terms of the engagement (since others, unaware of the reasons for the procedures, may
misinterpret the results). Accordingly, we expressly disclaim and do not accept any
responsibility or liability to any party other than [company full name, name of intended users
and name of group of users] for any consequences of reliance on this report for any
purpose.

[Member’s signature]
[Date of the report of factual findings]
[Member’s address]
Conformity with International Standards on Related
Services
Except as noted below, APS-1 (revised) Agreed-Upon Procedures Engagements to Report
Factual Findings conforms to international standard ISRS 4400, issued by the International
Auditing and Assurance Standards Board (IAASB), an independent standard-setting board
of the International Federation of Accountants (IFAC). The main differences between APS-1
(revised) and ISRS 4400 are:

• APS-1 (revised) is not limited to procedures regarding ‘financial information’, whereas

ISRS 4400 is limited to financial information. (Ref: Para. 4)
• APS-1 (revised) applies to ‘procedures of an assurance nature’ whereas ISRS 4400
applies to ‘procedures of an audit nature’. Whilst the terms differ, they can be taken
to have the same meaning as indicated by the procedures listed in ISRS 4400,
paragraph 16, which are equivalent to those listed in APS-1 (revised) paragraph A15.
(Ref: Para. 4 & 13)
• APS-1 (revised) applies to the ‘member’, whereas ISRS 4400 applies to the ‘auditor’.
Whilst the terms differ, they can be taken to have a similar meaning, referring to a
suitably qualified professional. (Ref: Para. 1)
• Many users of agreed-upon procedures reports obtain benefit from the credibility that
their preparation by an independent member (not just a skilled and competent one)
gives them. However independence is not an essential ethical requirement because
the member is not providing an opinion or conclusion. Therefore this standard
imposes a minimum level of independence (that is applicable to ‘Other Assurance
Engagements’ for ‘Reports that Include a Restriction on Use and Distribution’ (see
NZICA Code of Ethics paragraphs 291.25-27). This level is less onerous than that
required for audits or reviews of financial reports but is consistent with those
requirements, offering a familiar benchmark. However it also permits intended users
to reduce this level of independence if that is appropriate to their needs and to
disclose in the report of factual findings if modified independence requirements are
agreed. ISRS 4400 does not require the auditor to be independent, but requires the
auditor to state in the report of factual findings if they are not independent. (Ref: Para.
16)
• APS-1 (revised) includes requirements, which are additional to those contained in
ISRS 4400, for the member to:
o understand the needs and objectives of the intended users; (Ref: Para. 17)
o satisfy themselves that a regulator or representative of a group of users,
industry or the accounting profession does represent the group of users for
whom the engagement is intended; (Ref: Para. 18)
o only accept the engagement if those persons who are to perform the
engagement collectively have the capabilities and competence to perform the
procedures; (Ref: Para. 19)
o not accept an agreed-upon procedures engagement if: (Ref: Para. 20)
 it is unlikely to meet the needs of intended users;
 users are likely to construe the outcome as providing assurance;
 all of the elements of an assurance engagement are met;
 the engagement has no rational purpose; or
 the member needs to determine the sufficiency of procedures to be
performed, perform a risk assessment, evaluate the sufficiency and
appropriateness of the evidence or reach a conclusion;
o state in the terms of the engagement that intended users are responsible for
reaching any conclusions on the subject matter; (Ref: Para. 21)
o not exercise professional judgement to determine or modify the procedures to
be performed during the course of the engagement; (Ref: Para. 24)
 o request amended terms of the engagement if alternative or further procedures
are to be performed; (Ref: Para. 25)
o limit planning to the procedures agreed in the terms of the engagement; (Ref:
Para. 27)
o not perform a risk assessment; (Ref: Para. 28)
o not apply materiality to design procedures nor to assess factual findings; (Ref:
Para. 29)
o take responsibility for the direction, supervision and performance of the
engagement and the accurate reporting of factual findings and, when using
the work of others, evaluate the adequacy of their work and the findings
communicated; (Ref: Para. 33-34)
o document matters with respect to compliance with ethical requirements,
including independence, acceptance and continuance of client relationships
and acceptance of the engagement; (Ref: Para. 35)
o not extend the terms of engagement to the provision of assurance; (Ref: Para.
37)
o not evaluate the findings or provide a conclusion or opinion; (Ref: Para. 38)
o state in the report of factual findings that the responsibility for determining the
adequacy of the agreed-upon procedures is that of the engaging party; (Ref:
Para. 42(h))
o not issue a modified report or emphasis of matter, but instead report all errors
or exceptions in the factual findings, even if they are subsequently rectified, or
the inability to perform any of the agreed-upon procedures; and (Ref: Para. 45)
o exclude wording from the report of factual findings which may indicate that
assurance is being provided. (Ref: Para. 46)

Compliance with this Standard enables compliance with ISRS 4400.