Special Purpose Audit
Reviewing a limited subject matter — with a clear result
Go to the Initiative Audit serviceChecked against the official source:
Sometimes what you need is not an audit of the full financial statements but an answer to one specific question: is a particular transaction recorded correctly, do expenses comply with the terms of a contract, has the cost of a project been calculated properly.
For such tasks there is the special purpose engagement — with a subject matter and report format agreed in advance.
Typical engagements
- Reviewing the use of funds under a specific contract or grant
- Confirming a single financial statement item at a counterparty's request
- Reviewing settlements on a project or construction site
- Analysing a specific transaction and how it is recorded in the books
- Checking compliance with the terms of a cost-sharing agreement
How the engagement is defined
The engagement is set out in the contract and defines the subject matter, the review criteria and the report format at the same time. The usefulness of the result depends directly on how precisely it is worded: a vague engagement produces vague conclusions.
Limitation
A special purpose report does not replace an audit opinion on the annual financial statements: the scope of procedures is deliberately limited to the subject of the engagement and does not allow an opinion on the statements as a whole.
Special purpose engagement, agreed-upon procedures and the annual audit
- annual audit — an opinion on the reliability of the full financial statements (Articles 32 and 39 of Law ZRU-677 "On Auditing Activity");
- special purpose engagement (for example, under ISA 805 — a single statement or item) — an opinion with reasonable assurance on a specific subject matter;
- agreed-upon procedures — a list of factual findings with no conclusion and no assurance.
Standard engagements
- a report on the use of a grant or donor funds;
- a single statement item requested by a bank or counterparty;
- costs of a project or construction;
- compliance with contract terms or covenants.
Legal basis
The client of an initiative audit defines the focus and scope of the review itself (Article 38 of ZRU-677); the standards applied are International Standards on Auditing and standards for assurance engagements (Article 9).
Define your engagement
We will help you describe the subject of the review precisely — the value of the result depends on it.
Go to the Initiative Audit serviceFrequently asked questions
Can such a report be submitted to a bank?
If the bank asks for confirmation of a specific figure — as a rule, yes. If it requires an audit opinion on the annual financial statements, a full audit will be needed.
Who defines the subject of a special purpose engagement?
The client of an initiative audit defines the focus and scope of the review itself (Article 38 of ZRU-677).
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