Employee benefit plan audit services are designed to protect the financial integrity and assets contained in your plan and provide valuable information to plan administrators—not to mention legal and financial advantages from an EBP audit.
If your organization needs an EBP audit, one of the most important decisions of your plan administrator is selecting a qualified, independent auditor to perform the audit.
Three Factors to Consider When Choosing a Benefit Plan Auditor
1. Plan auditor qualifications
Federal law requires an employee benefit plan auditor responsible for signing the audit report to be licensed or certified as a public accountant by a State regulatory authority. In addition, the auditor must be independent and not have any financial interests in the plan or the plan sponsor.
2. Auditor experience and firm peer review results
One of the most common reasons for deficient audit reports is the failure of the auditor to perform tests in areas unique to benefit plans. The more training and experience an auditor has with employee benefit plan audits, the more familiar the auditor will be with specialized benefit plan auditing standards. In addition, firms performing benefit plan audits should have the audits subjected to their triannual peer review and annual internal inspection process. Peer review is an external inspection process performed by an external independent auditor. Peer review examines the audit firm’s adherence to their quality controls standards including “tone at the top”, hiring process and compliance with regulations to include; continuing professional education, compliance with auditing standards and the application of generally accepted accounting principles.
3. Association memberships
The Employee Benefit Plan Audit Quality Center (EBPAQC) is a voluntary membership center of the American Institute of Certified Public Accountants (AICPA) to help audit firms meet the challenges of performing audits of employee benefit plans. Being a member firm requires the audit firm to comply with a higher set of standards and practices specific to plan audits than non-member firms. In addition, the AICPA and EBPAQC requires its members to have their audit practice reviewed by internal and external qualified auditors.
Employee benefit plan audits have increasingly become the subject of examination by the DOL and IRS, so it is imperative to select a qualified employee benefit plan auditor. For a full list of EBPAQC member firms, click here.
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. Some key questions to ask when considering a benefit plan auditor are:
- Are you a CPA?
- How many employee benefit plan audits do you perform each year?
- Are the auditors in your firm performing benefit plan audits required to have specialized employee benefit plan audit training?
- Are your benefit plan audits subjected to peer review?
- What were the results of your most recent peer review?
- Are you a member firm of the AICPA’s Employee Benefit Plan Audit Quality Center?
Choosing a benefit plan auditor can be overwhelming and the selection of an experienced and reliable auditor is very important. R+R 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) and ESOP benefit plans. Contact Dan Harris for more information.
About Reynolds + Rowella
Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.
Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.