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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Brandt & Co is asked to report on Kessel Co's compliance with loan covenants. The bank, which is the sole intended user, wants the firm to carry out specified procedures and report only factual findings, with no conclusion expressing assurance. Which statement about this engagement is correct?

This is an agreed-upon procedures engagement. The practitioner performs specified procedures and reports factual findings without expressing any assurance conclusion. Users form their own conclusions, and the report is restricted to those who agreed the procedures. It is not an assurance engagement or a compilation.

  1. AIt is an agreed-upon procedures engagement, and the report is restricted to parties who agreed the proceduresCorrect
  2. BIt is a reasonable assurance engagement, because the bank is the intended user
  3. CIt is a limited assurance engagement, because procedures are specified
  4. DIt is a compilation engagement, because no conclusion is given

Explanation

In an agreed-upon procedures engagement under ISRS 4400 the practitioner performs agreed procedures and reports factual findings without expressing assurance. Users draw their own conclusions, and the report is restricted to those who agreed the procedures. Assurance engagements give a conclusion, and compilation involves assisting with preparing information.

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