Agreed Upon Procedures Letter Template for the United States

An Agreed Upon Procedures Letter is a critical engagement document that formalizes the relationship between you and an independent accountant for performing specific, pre-determined procedures. Unlike audits or reviews that provide assurance opinions, this engagement focuses solely on factual findings and observations based on procedures you and the accountant mutually agree upon.

When do you need this document?

You'll need an Agreed Upon Procedures Letter when your organization requires an independent accountant to perform specific procedures on financial or operational data without needing a full audit opinion. This commonly occurs during due diligence processes, regulatory compliance checks, grant reporting requirements, or when investigating specific accounting matters. Many organizations use these engagements for cost-effective verification of particular transactions, account balances, or operational procedures where a complete audit would be unnecessary or too expensive.

Key legal considerations

The engagement letter must clearly define the scope and nature of procedures to be performed, ensuring all parties understand the limitations of the engagement. You should specify that no assurance opinion will be provided and that the results are intended solely for specified parties' use. The letter must establish clear communication protocols, define the subject matter being examined, and outline reporting requirements. Additionally, you need to address confidentiality provisions, professional liability limitations, and the accountant's independence requirements. The document should also clarify that the engagement cannot be relied upon to disclose errors, fraud, or illegal acts, unless specifically designed to do so.

Legal requirements in United States

Under United States law, an agreed-upon procedures engagement must comply with AICPA Statement on Standards for Attestation Engagements (SSAE) No. 19 and AT-C Section 215. These attest standards require that you and the accountant agree on specific procedures before the engagement begins, and that the accountant maintains independence throughout the process. If your organization is publicly traded, additional Sarbanes-Oxley Act requirements may apply, particularly regarding internal control procedures. State accountancy laws also govern the accountant's professional conduct and licensing requirements. Where the procedures touch financial or personal data, the terms should align with the firm's privacy policy and any applicable state privacy laws. The engagement letter must clearly state that the procedures performed will not constitute an audit or review under generally accepted auditing standards, and that no opinion or assurance will be provided on the subject matter examined.

What does an agreed upon procedures report example look like?

The report is the deliverable the engagement letter promises. A typical agreed upon procedures report follows a consistent structure so the specified users can read the findings without ambiguity. Most reports include the following content in this order:

• Report title and addressee. Names the specified parties who engaged the accountant and confirms the report is restricted to their use.
• Statement of responsibility. Confirms that the specified parties are responsible for the subject matter and for the sufficiency of the agreed procedures, while the practitioner is responsible only for performing them.
• Scope and subject matter. States the account balances, transactions, or controls that were tested and the period covered.
• Procedures performed. Lists each procedure the practitioner or firm carried out, worded specifically enough that a reader could repeat the same test.
• Findings. Reports the factual result of each procedure, for example confirming that 25 of 25 sampled invoices matched the general ledger, with any exceptions noted.
• Disclaimer. Repeats that no opinion or assurance is expressed and that the accountant did not perform an audit or review.
• Restriction on use, signature, and date.

A short worked example of a single procedure and finding pair: Procedure: We compared the total cash disbursements recorded in the January ledger to the corresponding bank statement. Finding: The recorded total of $482,100 agreed to the bank statement with no differences. Every procedure in the report follows that procedure-then-finding pattern.

How is the report different from the engagement letter?

Who uses these reports and why?

Specified users request agreed upon procedures work when they need an independent party to test something specific rather than opine on a whole financial statement. A lender may want a firm to confirm covenant calculations, a grant provider may want spending tested against a budget, or a buyer's team may want particular balances verified during a transaction. Because the users define the procedures themselves, the report answers exactly the questions they set and nothing more. For an organization with international operations, the letter can also name which entities and jurisdictions the procedures cover, so the report reflects the full scope the parties intended.

How do you draft the letter that leads to the report?

Start with the specified users and the exact subject matter, then write each procedure so the finding will be unambiguous. Include the responsibility split, the independence and confidentiality terms, the fee basis, and the restriction on distribution. GenieAI drafts the engagement letter against these AICPA requirements and flags gaps in scope or responsibility wording before you sign, so the resulting report maps cleanly back to what the parties agreed. If you engage a firm regularly, you can save this as a reusable playbook so every future engagement letter follows the same terms.