Agreed upon procedures engagement for Not-for-Profit companies
Most finance officers, executives, and board members of not-for-profits are very familiar with the yearly accounting and auditing services that they receive from their CPA firm. However, there may be times when a not-for-profit has more specific needs that can’t be satisfied by the traditional accounting services that it’s receiving. Therefore, a “nontraditional engagement” may be needed in cases like these.
A nontraditional engagement is any assurance service other than preparation, compilation, review, or audit of financial statements. One type of nontraditional engagement is the agreed upon procedure engagement (AUPE) in which a practitioner is hired by a client to report findings that are based on specific procedures on a subject matter that is mutually agreed upon by both parties.
The practitioner then provides a report which is based on evaluation of data and factual findings regarding financial information. In an AUPE, no opinion is expressed, or assurance is given. A report is generated with details of the specific procedures performed and the results of those procedures.
Satisfying requirements
An agreed upon procedure can be used to provide a not-for-profit with an independent review of a specific component or internal control system with the organization. This can be a very useful tool to not-for-profits in order to identify potential weaknesses in internal controls and to satisfy grants or requirements of contracts.
AUPEs would be carried out in addition to any annual reviews or audits in order to provide a level of results that are needed for the management of a not-for-profit to properly evaluate a specific area of the organization. The AUPE has been found to be more responsive to the needs of many smaller not-for-profits vs typical audit standards because the engagement focuses on controls over disbursements, receipts, and regulatory compliance with governmental agencies. An audit, however, looks at controls only for the limited scope of financial reporting.
Our services
GYL, certified public accountants that specialize in not-for-profit management, has a complete and thorough understanding of the importance of many factors that determine the success of your not-for-profit organization. Our group of professionals has an in-depth understanding of the regulatory environment that exists with respect to the not-for-profits. We offer a full range of auditing, accounting, tax, and consulting services to a variety of industries, including not-for-profits, in Southern California.
The quality of a not-for-profit’s systems of internal controls are often a focus for management, the governing boards, and various outside interests. We can assist your organization by providing agreed upon procedure engagements in order to assess internal control risks as well as testing staff compliance with accounting systems and to evaluate the efficiency of these systems.
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