audit process words

In general, employee benefit plans, or pension plans, with 100 or more participants are required by law to have a yearly audit. These audits need to be performed by an independent, qualified CPA. There are a number of questions you should ask when considering an auditor, including inquiries about the CPA firm’s experience, certification, and independence.

The Department of Labor has outlined a list of things to consider when hiring an auditor for your retirement plan. Their recommendations include:

  • An employee benefit plan auditor must be a certified public accountant in their state.
  • The auditor you choose to audit your retirement plan should not have any financial interests in the plan that would jeopordize an objective opinion.
  • The auditor you choose should be an expert in pension audits. Look for an auditor who is a member of the AICPA’s Employee Benefit Plans Audit Quality Center. They agree to meet specific training and expertise requirements.
  • Ask a potential pension auditor about other clients, and call references directly if possible.

Once you choose an employee benefit plan auditor and have completed the audit, the auditor will present the audit report. the Department of Labor suggests these questions when reviewing the report:

  • Have benefit plan assets covered by the audit been fairly valued?
  • Have plan obligations been properly stated and described?
  • Were contributions to the plan timely received?
  • Were benefit payments made in accordance with the plan terms?
  • Will any identified issues affect the plan’s tax status?
  • Were there any transactions prohibited under ERISA that were identified?

Carpenter, Evert and Associates offer a full range of retirement plan audit services. We are members of AICPA’s Employee Benefit Plans Audit Quality Center and have performed retirement plan audits for a wide range of clients. For more detailed information, contact our Retirement Plan Audit specialists at (952) 831-0085.

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