Brown Enterprises Limited has huge funds locked up in its trade receivables standing at around 100 crores as on 31st December, 2023. The management…

(a) The above situation involves an engagement to perform agreed-upon procedures. In such an engagement, the auditor 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. The management has requested CA. Karuna to take up the assignment and prepare report for management in accordance with professional standards. Such type of engagement and its reporting falls in purview of SRS 4400. The reference to auditor in SRS 4400 does not imply that a person performing related services need necessarily be the auditor of entity's financial statements. Hence, a person performing related services need not necessarily be auditor of entity's financial statements. Therefore, it was proper for CA. Karuna to accept above engagement. (b) While reporting, she should take following precautions so that readers of report do not misunderstand its scope: 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 auditor 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 those parties 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.