Do You Need Special Purpose Audit (UAE) - AUP? A Practical Starting Point
Sometimes a bank, a franchisor, a joint-venture partner, or a regulator does not want an opinion — they want specific, factual answers to specific questions, delivered fast and without the interpretive layer of an audit or review. An Agreed-Upon Procedures engagement does exactly that: PNPC Global performs a defined set of procedures agreed in advance with the engaging party and reports only the factual findings, with no assurance conclusion attached, leaving the reader to draw their own conclusions from the facts. Run under International Standard on Related Services (ISRS) 4400 (Revised), an AUP engagement is faster to scope, faster to execute, and precisely targeted at the question that actually needs answering — whether that is confirming turnover for a royalty calculation, verifying compliance with a facility covenant, or checking a specific balance before a transaction closes.
What You're Really Buying
A Special Purpose Audit — Agreed-Upon Procedures (AUP) engagement is a factual-findings engagement performed under International Standard on Related Services (ISRS) 4400 (Revised), 'Agreed-Upon Procedures Engagements'. Unlike an audit or a review, an AUP engagement provides no assurance opinion at all. Instead, the practitioner agrees a specific, narrow set of procedures with the engaging party (and, where relevant, other named parties who will rely on the report), performs exactly those procedures, and reports the factual findings — what was found, tested, or confirmed — without expressing any conclusion on whether the underlying subject matter is 'fairly stated', 'true and fair', or otherwise acceptable.
For the full scope, current process and what PNPC includes, see the dedicated Special Purpose Audit (UAE) - AUP service page.
When You'd Need This
- A franchisor or licensor needs the franchisee's or licensee's reported turnover verified against specific supporting records before calculating a royalty, without commissioning a full audit of the franchisee's business
- A bank or lender wants a specific covenant ratio, debt-service coverage calculation, or drawing-power figure independently recalculated and confirmed at a point in time, rather than a full audit opinion
- Joint-venture partners need a defined cost allocation, profit-share calculation, or expense reimbursement claim verified against the JV agreement's formula, without a full audit of either partner
- A buyer in a smaller transaction needs specific balance sheet items (cash, related-party balances, a revenue recognition test) checked quickly and cheaply, where a full financial due diligence exercise is not proportionate to deal size
Before You Assume You Need This
- Your mainland or free zone licence renewal requires the standard annual statutory audit of full financial statements — an AUP engagement provides no assurance opinion and cannot substitute for that requirement
- The engaging party wants a conclusion or opinion on whether the numbers are fairly stated, materially correct, or reasonable — that requires an audit (ISA 800/805) or, for lighter assurance, a review (ISRE 2400), not an AUP engagement
- The procedures cannot be defined with precision in advance — if the request is essentially 'look into this and tell us what you think', that calls for a review, an audit, or an investigative engagement, not AUP, because ISRS 4400 requires specific, agreed procedures rather than open-ended enquiry
Questions We're Actually Asked
What exactly is an Agreed-Upon Procedures (AUP) engagement?
It is an engagement where PNPC performs a specific, precisely defined set of procedures agreed in advance with the party (or parties) commissioning the work, and reports only the factual results — with no opinion, no conclusion, and no assurance expressed. It is governed by International Standard on Related Services (ISRS) 4400 (Revised). The reader of the report draws their own conclusions from the stated facts.
How is AUP different from a Special Purpose Audit?
A Special Purpose Audit (under ISA 800/805) still results in an opinion — reasonable assurance that a defined element or set of accounts is fairly stated against an agreed framework. An AUP engagement expresses no opinion at all; it simply reports factual findings against specifically agreed procedures. AUP is faster and cheaper because there is no professional judgement to exercise in reaching a conclusion — but it also gives the reader less than an audit opinion would.
Who typically commissions AUP engagements in the UAE?
Franchisors and licensors verifying franchisee turnover for royalty calculations, banks confirming a specific covenant ratio, joint-venture partners checking a cost-share or profit-share calculation, buyers in smaller transactions wanting a targeted check rather than full due diligence, and occasionally regulators or grant-giving bodies with a narrowly defined verification requirement.
Where PNPC Fits In
Talk to PNPC Global before your next royalty statement, covenant certificate, or JV cost-share reconciliation is due — we scope the procedures precisely so the report answers exactly the question your franchisor, bank, or partner is asking.
PNPC Global has advised Dubai businesses since 1986. Explore the full Audit & Assurance practice for related services, or go straight to the Special Purpose Audit (UAE) - AUP page for specifics.
This is a general explainer, not a substitute for checking today's rules with PNPC or the relevant authority — figures and deadlines move, so none are quoted here as fixed.