Companies that provide employee benefit plans (EBPs) may be familiar with the auditing process required by the Department of Labor. Generally, employee benefit plans with 100 or more participants are required to have an independent audit as part of their obligation to file the annual report Form 5500. An annual audit may be an unavoidable cost of doing business, but it does not need to be a cumbersome process.
You Need an Employee Benefit Plan Audit, Now What?
One of the most important duties of a plan sponsor is to hire a qualified certified public accountant. Hiring a qualified auditor helps to protect the assets and financial integrity of the plan and ensures that plan sponsors and various service providers fulfill their fiduciary responsibilities to the plan and plan participants. A qualified auditor also helps keep the plan in compliance with a variety of regulations, which can save the company from penalties being assessed by the Department of Labor (DOL) or possible lawsuits by plan participants.
Finding the Right Auditor
Even though a plan undergoes an audit, the audit may be deficient due to the selection of an inexperienced auditor. It is important to work with an auditing firm that has depth of experience conducting plan audits. The more technical training and experience an auditor has with employee benefit plan audits, the more familiar they are with compliance requirements, plan operations, and specialized auditing standards. Be sure to inquire about the type and amount of benefit plan audit training members of their team receive annually.
To ensure you have an experienced auditor, you may want to discuss their work with other employee benefit plan clients to ensure they are well versed in your plan type. You may also inquire if the auditor is a member of the AICPA’s Employee Benefit Audit Quality Center, which is a national network of CPA firms that demonstrate commitment to employee benefit plan audit quality.
For these reasons, the selection of an experienced and reliable auditor is very important. Anders can help you and your plan administrators comply with key ERISA, DOL and IRS requirements. Our audit experience includes single and multi-employer defined benefit, profit sharing, 401(k), ESOP, and health and welfare benefit plans, as well as public employee retirement systems. Contact an Anders advisor below to learn more.