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Preparing for a New Retirement Plan Audit Experience

The Employee Retirement Income Security Act of 1974 (“ERISA”) requires annual audits of plan financial statements by an independent qualified public accountant for plans with more than 120 eligible participants at the beginning of the plan year. Yearly plan audits generate significant activity for human resources and finance executives.
 
In order to make audit outcomes better, a change in the process will be effective in 2022, eliminating the so-called “limited scope” audit. Employers will see a much more extensive audit report than they are accustomed to receiving. The expanded report intends to clarify the procedures performed and the results of the audit more clearly. There is more accountability for plan sponsors in the new audit rules.
 
CPA plan audits do not intend to validate a plan sponsor’s reporting to the Internal Revenue Service on topics unrelated to a plan’s financial transactions. For example, Form 5500s can conceal a colony of errors with plan fees presented incorrectly or not at all, dividends and gain amount not posted, and inaccurate calculations—those errors tip off snooping regulators to fiduciary deficiencies that trigger enforcement audits and can lead to substantial fines.
 
Roland|Criss offers an audit management service that includes a review of our client’s 5500s and their financial statements to ensure conformity with the annual plan reporting. We sign the 5500 as a demonstration of our confidence in the accuracy of our work.