What are agreed-upon procedures
Agreed-Upon Procedures (ISRS 4400) is an engagement format in which the auditor performs a specific list of actions agreed with the donor and documents the factual findings without expressing an audit opinion. In plain terms: the donor specifies exactly what to check, and the auditor checks it and honestly describes what was found.
How ISRS 4400 differs from a financial statement audit
- Audit (ISA 800/805) — the auditor forms an opinion on the reliability of the project’s financial statements.
- Agreed-upon procedures (ISRS 4400) — the auditor does not form an opinion, but only performs the agreed procedures and reports the facts; the donor draws the conclusions.
That is why an agreed-upon procedures report is often faster and cheaper than a full audit, and it is sufficient for most grant requirements.
When a donor requires ISRS 4400 specifically
This format is the de facto standard for reporting on grants from international donors: UN agencies, the EU, European governmental donors and foundations. A grant agreement usually includes an annex (Terms of Reference) with the list of procedures the auditor must perform.
What a factual-findings report contains
- the list of agreed-upon procedures the auditor performed;
- the factual findings for each procedure (what was checked and what was found);
- a description of deviations and exceptions, if any;
- where needed, annexes with a breakdown of expenditure by budget line.
Who can perform agreed-upon procedures
An ISRS 4400 engagement is carried out by an independent auditor or audit firm entered in the Register of Auditors and Audit Entities. MK Audit prepares agreed-upon procedures reports for grants and donor projects in Ukrainian and English — in the format the donor accepts.
Frequently asked questions
Is ISRS 4400 an audit?
Formally it is not an audit: the auditor does not express an opinion, but only performs the agreed procedures and describes the factual findings. But for grants this format is usually exactly what the donor requires.
Who defines the list of procedures?
The donor — in the grant agreement or a separate Terms of Reference. The auditor performs exactly those procedures.
In what language is the report prepared?
In Ukrainian and/or English — depending on the donor’s requirements. International donors usually accept a report in English.
Need an agreed-upon procedures report for a donor? +38 (050) 671-55-67 or mkauditsend@gmail.com.
