When an agreed-upon procedures report is enough

Not every lender covenant requires a full audit opinion. Sometimes the counterpart only needs comfort on a royalty base, a grant claim, or a defined receivable population. That is when an agreed-upon procedures engagement fits.

Lock the procedure list first

Ambiguous procedures produce ambiguous reports. We draft the exact steps with the requesting party before fieldwork — sample size, source documents, and the form of findings.

Understand the limitation

The report does not say the financial statements are fairly presented. It says we performed steps A–F and found X. Readers who need a statutory opinion should commission one.

Keep the fee proportionate

Because scope is narrow, fees are usually lower than a full audit. If the procedure list grows into testing most significant accounts, we will recommend converting to a statutory engagement instead of stretching AUP beyond its purpose.