Terms of use of Agreed Upon Procedure Report

INMACS Management Services Limited, a public limited company registered in India (“INMACS”)  is been engaged by its clients to perform Agreed Upon procedures (“AUP”) for the purpose of offering to clients, its management and partners (collectively, “Authorized Users” in India) and other stakeholders, where so specifically agreed, additional transparency about facts, adequacy of capital, financial parameters, solvency, appropriateness of  controls or processes in the entity and may be in some specific cases efficiency and effectiveness of  management of various operational , technical and regulatory aspects of an entity, or in cases where assets are held under trust, whether these are monitored to meet all fiduciary obligations and duties.

The Agreed Upon procedures are outlined by management or the person who engaged us and such AUP are vetted for their relevance, adequacy and appropriateness to meet the stated objectives, and executed by INMACS under Indian Standards on Related Services (SRS 4400) Engagement to Perform Agreed Upon Procedures issued by the Institute of Chartered Accountants of India, compatible to International Standard (ISRS) 4400, carried out in accordance with terms of this engagement, without expressing any assurance. No audit or review are performed, except the Agreed Upon Procedure.

Specifically, the Agreed Upon Procedures are detailed, clearly understood and appropriately disclosed in the Agreed Upon Procedures Report. INMACS’s findings, are intended to ensure that, at the time these procedures were performed, necessary professional and technical care is taken to enable satisfaction of the purpose and underlying objective of the client assigning the engagement. The report is shared with those who are entitled to receive it in terms of the engagement letter and the findings are presented in a confidential manner. No third parties can access the information provided in the report or the nature and objective with which the agreed upon procedures were performed.

INMACS once engaged to perform the Agreed Upon procedures and issue a report, data is collected and aggregated through a variety of methods such as: enquiry, analysis, observation, inspection, querying application programming interfaces (“APIs”) to appropriate sources and database, third party sources as may be relevant and inspecting or observing relevant agreements and/or account statements as accessed.

INMACS obtains the detail required directly from the appropriate sources as may be required in terms of meeting the objective, subject to agreed upon procedure, data and information so obtained is analysed, compared with published and/or third-party data, collated, and recalculated to confirm the findings, as may be professionally considered appropriate in terms of the national and the international standards.

Results of the procedures are presented in “Findings & Results”

The methods and procedures employed are provided in the report and a disclosure is made about the intended authorized user of the report. The specified agreed upon procedures, the specified subject matter, and the specified elements scope, coverage and relevant subject matter and the framework or technology relevant to the AUP is also disclosed for better understanding of procedures, findings and results.

 The findings and results are highly confidential and are not to be disclosed to any person other than specifically agreed in writing by INMACS with the client. Any unauthorized or unintended user is not to be provided copies or access of the AUP or the Finding and results, as the disclosure to unintended persons or entities who are not Authorised users may not be able to appreciate the whole background, assumptions and research undergone including the limitations of AUP and of the Finding and result.

An unauthorised user may be adversely impacted or effected if they access the AUP and AUP report. Such Users may refrain from unauthorized use and specially refrain from drawing conclusions or using the extract hereof or of the AUP report, which is not useable in any manner, without understanding and appreciating all assumption, basis and nitty-gritty of the AUP and status of the internal operational and financial control of the entity in question and inherent limitations of AUP. INMACS will not be liable for any such usage of AUP, once made public or shared with third party or unauthorized users without prior written consent of INMACS.

Terms of Use of Independent Report of INMACS on Agreed Upon Procedures

To the Management of client

INMACS perform the procedures enumerated in the report on specified date and time at which the status of facts are to be examined as per agreed upon procedures.

The AUP are performed to meet the intended purpose of demonstrating that, at the time, the procedures were performed, what was the status of specific facts or situations or assets or liabilities or Solvency or deposits or borrowings or charges or conditions or compliances or technology or achievement and similar other parameters, as may be laid down, specified or required by the client in terms of the Agreed Upon Procedures.

The procedures and the associated findings are set forth in the specified sections:

–          Procedures: Listing of all procedures agreed to by Client and performed by INMACS.

–          Findings & Results:  Disclosure of professional findings and results of procedures

We are engaged by the client to perform an Agreed Upon procedures engagement. INMACS conducts the engagement in accordance with Indian Standards on Related Services (SRS 4400) Engagement to Perform Agreed Upon Procedures issued by the Institute of Chartered Accountants of India, Compatible to International Standard (ISRS) 4400).

No Audit or review is to be performed except Agreed Upon Procedures.

We are not engaged to and do not conduct an audit, examination or review engagement, and do not express an opinion or conclusion or assurance or issue a certificate.

Had we performed additional procedures, other matters might have come to our attention that would have been reported to the Authorised users.

INMACS rely upon management representations, disclosures, books of accounts, databases, technical access tools, software and hardware used, technological limitation of the subject matter, third party confirmation.

The fact that the information from different parties are subject to reconciliation and may vary as were obtained over a period of time. Due to inherent limitation, information cannot be obtained exactly simultaneously, due to natural time lag and information & data updating every milli second.

Every reasonable effort is to be made by the client entity that data provided or made available for AUP and examined is free from any material misstatement either due to fraud or error but no warranty or guaranty can be given, being not in the scope of AUP.

The subject matter will have its own technical inherent limitation in verification of existence of certain facts as these are visible on examination, in the absence of availability of tools and technological capability enhancement requirement of professional skill of AUP team, in dynamic changing technological universe.  

We are required to be independent of the client and the entity whose data or information is being subjected to AUP to meet our ethical responsibilities, in accordance with the relevant ethical requirements related to our Agreed Upon procedures engagement.

The AUP report is intended solely for the specified Authorised user and is not intended to be and should not be used by anyone other than these specified parties.

The report is as of a specified point in time and INMACS has no responsibility to update the report or findings therein for subsequent points in time.

INMACS has no responsibility towards any person or entity who are not Authorised users. The report has its limitation to set out all the issues and shortcoming in the operational and financial controls as well as technological limitations in the system and procedures of all the AUP and the subject matter on which the same is applied. There are issues of access to third party information, limitations on cooperation by regulatory bodies and non-availability of regulatory information and findings appropriately.

INMACS is also not responsible for unauthorized use or reliance on the AUP or the report in respect of AUP including finding and results. INMACS carry out various AUP as per management representation and the internal control procedure including books of accounts, records, data , vouchers and other evidences and documents as provided by client management and/or its counterparties and other stakeholders.

The Agreed Upon Procedures and the AUP report is subject to the terms of use found here: https://inmacs.com/client-report/AUP/terms-of-use/

Introduction

• In an engagement to perform agreed-upon procedures, the Inmacs is engaged by the client to issue a report of factual findings, based on specified procedures performed on specified subject matter of specified elements, accounts or items of a financial statement. For example, an engagement to perform agreed-upon procedures may require the Inmacs to perform certain procedures concerning individual items of financial data, say, accounts payable, accounts receivable, purchases from related parties and sales and profits of a segment of an entity, or a financial statement, say, a balance sheet or even a complete set of financial statements.
• The Indian as well as International Standard are directed towards engagements regarding financial information. However, it may provide useful guidance for engagements to perform agreed upon procedures regarding non-financial information; provided the professional has adequate knowledge of the subject matter in question and reasonable criteria exist on which to base his findings.

 Objective of an Agreed-upon Procedures Engagement

• The objective of an agreed-upon procedures engagement is to carry out procedures to which the Inmacs and the entity and any appropriate third parties have agreed and to report on factual findings.
• Inmacs simply provides a report of the factual findings of agreed upon procedures, no assurance is expressed in the report. Instead, users of the report assess for themselves the procedures and the findings reported by Inmacs and draw their own conclusions from the work done by Inmacs.
• The report is restricted to those parties that have agreed to the procedures to be performed since others, unaware of the reasons for the procedures, may misinterpret the results. However, it is possible in certain circumstances that the report of the engagement may not be restricted only to those parties that have agreed to the procedures to be performed, but made available to a wider range of entities or individuals, e.g., in case of government organisations.

 General Principles of an Agreed-upon Procedures Engagement

 Inmacs comply with the Code of Ethics. Ethical principles governing the professional’s responsibilities for this type of engagement are:

 (a) Integrity;

(b) Objectivity;

(c) Professional competence and due care;

(d) Confidentiality;

(e) Professional conduct; and

(f) Technical standards

Independence is not a requirement for agreed-upon procedures engagement, however, the terms or objective of the engagement may require Inmacs to comply with the independence requirements of the Code of Ethics. Where the professional is not independent, a statement to that effect is made in the report of factual findings. Inmacs conduct an agreed-upon procedure engagement in accordance with the standard and the terms of the engagement.

Defining the Terms of the Engagement

Inmacs ensures with representatives of the entity and, ordinarily, other specified parties who will receive copies of the report of factual findings, that there is a clear understanding regarding the agreed procedures and the conditions of the engagement. Matters to be agreed include the following:

• Nature of the engagement including the fact that the procedures performed will not constitute an audit or a review and that accordingly no assurance will be expressed.
• Stated purpose for the engagement.
• Identification of the technical or financial or other information to which the agreed-upon procedures will be applied.
• Nature, timing and extent of the specific procedures to be applied.
• Limitations on distribution of the report of factual findings. When such limitation would be in conflict with the legal requirements, if any, Inmacs would not accept the engagement.

It is in the interests of both the client and Inmacs that the Inmacs sends an engagement letter documenting the key terms of the appointment. An engagement letter confirms the Inmacs’s acceptance of the appointment and helps avoid misunderstanding regarding such matters as the objectives and scope of the engagement, the extent of the Inmacs’s responsibilities and the form of reports to be issued.

In most cases, specialised assignments of agreed upon procedures, Inmacs will first undertake an initial review to evolve and examine a proof of concept for the engagement to determine client’s acceptance benchmark. Inmacs also determines that agreed upon procedures, as a minimum, as may be required to be performed, will meet the objective of the client. Inmacs will satisfy itself that the AUP will be able to meet the requirement of national and international standards, code of ethics and Inmacs will be able to ensure professional excellence while undertaking agreed upon procedure. While undertaking testing of the findings’ quality and reportable results, Inmacs will determine that the AUP will be to the satisfaction of all stakeholders. Inmacs will also pursue with the client about certain additional procedures, evidences, supporting and verifications, where Inmacs is not able to satisfy itself about AUP and reportable finding and results.

 Matters that would be included in the engagement letter include:

• A listing of the procedures to be performed as agreed-upon between the Inmacs and authorised users.
• A statement that the distribution of the report of factual findings would be restricted to the specified parties who have agreed to the procedures to be performed (Authorised users).

Planning

 Inmacs plan the work so that an effective engagement will be performed.

Documentation

Inmacs document matters which are important in providing evidence to support the report of factual findings, and evidence that the engagement was carried out in accordance with standards and the terms of the engagement.

Procedures and Evidence

Inmacs carry out the procedures agreed-upon and use the evidence obtained as the basis for the report of factual findings. The procedures applied in an engagement to perform agreed-upon procedures may include:

• Sourcing of relevant data from the client, various private and public databases, third parties
• Querying data through application programming interfaces (“APIs”)
• Examination of relevant agreements, documents and other evidences
• Inquiry, data collation and analysis.
• Recomputation, comparison and other accuracy checks.
• Obtaining confirmations.

 Reporting

 The report on an agreed-upon procedures engagement describe the purpose and the agreed-upon procedures of the engagement in sufficient detail to enable the reader to understand the nature and the extent of the work performed. The report would also clearly mention that no audit or review has been performed.

 The report of factual findings would contain:

• Title;
• Addressee (ordinarily, the appointing authority );
• Identification of specific financial or non-financial information to which the AUP have been applied;
• A statement that the procedures performed were those agreed-upon with the authorised users;
• A statement that the engagement was performed in accordance with the Standard applicable to agreed-upon procedures engagements;
• Identification of the purpose for which the agreed-upon procedures were performed;
• A listing of the specific procedures performed;
• A statement that the procedures performed do not constitute either an audit or a review and, as such, no assurance is expressed;
• A statement that had the Inmacs performed additional procedures, an audit or a review, other matters might have come to light that would have been reported;
• A statement that the report is restricted to authorised users that have agreed to the procedures to be performed;
• A statement (when applicable) that the report relates only to the elements, accounts, items or financial and non-financial information specified and that it does not extend to the entity’s financial statements taken as a whole;
• Date of the report;
• Place of signature; and
• Professional’s signature