"Reporting on a set of financial statements without giving assurance."

Background

Most SMEs and companies are no longer required to have their financial statements audited. This has created an opportunity for many smaller accounting firms to provide alternatives.

Alternative reports have the potential to be an attractive and fast growing service offering to SMEs. Clients may not need an audit, but may greatly benefit from an AUP engagement to satisfy banking or vendor needs (for example, to advance a business transaction, or verify to management that certain financial reporting processes and controls are operating effectively).

These alternative reports are:
• compilations
• agreed-upon-procedures, and
• reviews

In an Agreed-Upon Procedures (AUP) Engagements the practitioner provides a report based on factual findings regarding financial information—no assurance is expressed. The report is not distributed publicly—it is restricted to those parties that have agreed to the procedures.

The opportunities for business accountants

AUP engagements are based on the IAASB’s ISRS 4400, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information.

This standard as prescribed by CIBA when a BAP(SA) performs an AUP engagement.

Examples of AUP engagements, both on financial and non-financial information, include:
• Accounting Officer reports issued for Close Corporations, Schools, etc.
• Due diligence when buying or selling a business.
• Verifying cash balances.
• Checking security balances.
• Income tax provisions.
• Accounts receivable/payable processes.
• Special reviews of loan portfolios.
• Reviews of internal control and environmental management systems.
• Royalty agreements compliance.
• Employer compliance/payroll audits.
• Purchasing department compliance.

AUP engagements may be prescribed by statute or agreed to in contract.

What CIBA needs to do

CIBA is a legislative controlling body for accountants, accounting officers and independent reviewers. As a controlling body we are required to monitor and sanction compliance to standards of member conduct. We perform this function by ensuring compliance by our members to the IAASB’s engagement standards. We offer CPD and training courses to help guide members with their everyday challenge in the workplace. We lobby government and SME associations to allocate work to business accountants.

This responsibility is included in the CIBA MOI and agreed to by each persons that becomes a CIBA member.

What you need to do

The firm should study ISRS 4400 and ensure that all AUP engagements are performed in terms of this standard. The firm should study any relevant laws, regulations, founding documents or contract terms to determine the qualifications of the persons required to perform the engagement, prior to performing the engagement.

Members are required to register with www.saiba.academy and read www.accountingweekly.com to stay updated and do a specialist license to unlock additional advisory work.

1. Do a google search to identify the types of companies that are likely to need this particular service.
2. Write an email or letter to them and explain how you can help them.
3. Do the CIBA CPD and relevant license related to the particular service.
4. Perform the service for your new client.
5. Alternatively contact a CIBA Strategic Alliance partner.

Additional resources

CIBA has provided a number of guides, videos and PowerPoint slides that will assist accountants with understanding their responsibilities in terms the various types of engagements:

• View the Practice Support Library for more
• www.accountingweekly.com
• wwww.saiba.academy
• Log into your member profile to access these and other resources