AUP vs. a Full-Scope Audit/Review
In a full scope audit or review, the primary focus is on the issuance of financial statements, and footnotes describing the Church’s major accounting policies, prepared in accordance with generally accepted accounting principles (GAAP) by a Certified Public Accountant (CPA). Professional standards dictate minimum audit requirements and procedures to be performed. All of these audit procedures must be performed whether they provide direct benefit to Church leadership or not. As an alternative, the Financial Accountability Checkup is referred to as an “Agreed-Upon Procedures” (AUP) engagement. In this type of engagement, Church leadership and our firm have the flexibility to agree upon the specific procedures to be performed, allowing us to assist in evaluating the areas that present the highest risk or provide the most benefit, while eliminating the high cost of a CPA performing procedures that do not.
We design this approach to be pro-active and forward-looking. AUPs don’t take the place of an audit, but they are helpful in identifying accounting procedures in your church, which may be problematic, in an effort to rectify them.
In an AUP engagement, our procedures are focused on evaluating your general ledger and internal/congregational reports – the financial tools actually used by Church leadership to make decisions – rather than the church investing time and money in engaging a CPA firm to prepare or evaluate GAAP-based financial statements. Our AUP report provides a description of your church’s procedures reviewed. Thus, to assist leadership, our report connects procedural findings and related recommendations.
We believe that performing an AUP engagement provides the overall benefits of objectivity and expertise from our firm’s over 20 years of church accounting experience, while adding the flexibility to design the scope of the procedures based on the Church’s needs. As a result, external resources and the Church leadership’s time and effort are allocated to areas providing the highest perceived value. Together we can design an approach that provides the most value for your Church.