In a recent government study on the quality of audit work performed by independent, qualified public accountants with respect to financial statement audits of employee benefit plans, 39 percent of the audits reviewed contained major deficiencies that would lead to rejection of the filing of Form 5500. While it can be tempting to take the easy route and use your current CPA firm for the 401(k) plan audit, it is important to hire a firm with the background, training and ongoing professional development to conduct these audits.
There are many resources available to you that can help you make an informed decision in selecting an auditor. For instance, the Department of Labor issued a guide called Selecting and Audit Firm for your Employee Benefit Plan that outlined several key factors plan sponsors should consider when determining whether an auditing firm complies with established professional standards. Factors include:
- The amount of employee benefit plan audit work in the auditor’s overall practice
- The adequacy of technical training and knowledge of auditors conducting employee benefit plan audits
- The awareness of auditors of the uniqueness of employee benefit plan audits
- The perception of plan administrators and/or auditors of the importance of employee benefit plan audits beyond fulfilling a governmental regulatory requirement
In addition, Blue Prairie will be hosting a webinar on September 28th at 10:00am ET to discuss ways to avoid triggering a DOL/IRS plan audit. Click here to Register. With the right partner, your plan audit will yield a filing that adds real value to your organization while meeting all regulatory requirements of the DOL.