Knowledge Center

  • RSS Feed
  • Contact
  • Print

KNOWLEDGE CENTER >

How to Select an Auditor for Your Employee Benefit Plan

September 27, 2016

Jessie T. Kanter, CPA

All employee benefit plans (401(k), 403(b), Pension and other retirement and health and welfare plans) categorized as “large” plans for Form 5500 reporting purposes are required to have an annual audit performed by an independent auditor.  Not sure if your plan is required to have an audit?  See our article on audit requirements here.

The Department of Labor (DOL) continues to emphasize the importance of audit quality for employee benefit plans.  A key piece of audit quality is selecting the appropriate auditor for your plan.

Key Attributes of a Plan Auditor

Independence: An auditor is required to be independent in order to render an objective opinion on the plan’s financial statements.

Certified: An auditor must be licensed or certified as a public accountant with a state regulatory authority.

Experience: The DOL cites the most common reason for deficiencies in audits of employee benefit plans is the lack of experience with auditing these plans.  Employee benefit plans are unique and auditors performing audits of plans require specialized training and experience in order to conduct a quality audit.

AICPA Employee Benefit Plans Audit Quality Center (EBPAQC): The DOL has conducted studies of audit quality and has found that EBPAQC members have far fewer deficiencies in plan audits than those who are not members.  EBPAQC members are required to maintain certain levels of training and perform certain quality control functions within the firm. 

Ask the Right Questions

The following are some example questions to assist you in vetting potential auditors for your annual plan audit.  They are designed to help you gather information about the experience level and commitment to quality of your prospective auditor.

  • Do you have audit personnel dedicated to plan audits?
  • How many plan audits does your firm perform?
  • Is your firm a member of the EBPAQC?
  • What kind of training does your EBP staff obtain?
  • How is the engagement team structured?
  • How does your staff keep up to date on benefit plan industry developments and how do you communicate pertinent information to your clients?
  • Will you provide us a detailed listing of what you will need to review as part of the audit?
  • Please explain to us the audit process, including planning, fieldwork and completion.
  • (For 403(b) plans) What is your specific experience related to 403(b) plans?
  • (For Pension plans) What is your specific experience with defined benefit pension plans?
  • Do you have experience in dealing with [insert your third party administrator and custodian]?

Your prospective auditor should be able to provide you information relevant to their experience with employee benefit plans, including their commitment to quality audits and proactiveness related to industry developments.

View Jessie's Bio Here >>

How BlumShapiro Can Help

Currently serving approximately 280 plans, BlumShapiro has vast experience in understanding the intricacies of your plan and translating that knowledge into an effective audit. Our more than 100 professionals are trained in auditing benefit plans, and experienced in financial reporting, compliance, operations and fiduciary responsibilities. Learn more about our benefit plan audit services >>

 

Advisors | Auditors | Consultants | CPAs - Blum Shapiro is one of the premier public accounting firms in the northeast and a Top 100 CPA Firm in the U.S. Our professionals serve businesses, individuals and organizations in Boston (MA), Hartford (CT), Cranston (RI), Shelton (CT) ,Quincy (MA) and Newton (MA) with audit, tax and business consulting services. Our firm has developed practice areas in automotive, construction, education, government, healthcare, hospitality, manufacturing, nonprofit organizations and professional service firms. New Haven CT, Fairfield CT, Norwalk CT, Waterbury CT.