This is a question we commonly get from clients who offer an employee benefit plan to employees. The answer, with a few exceptions, is: when the plan has 100 eligible participants.
If your employee benefit plan does require an audit, one of the most important decisions the plan’s administrator will make is selecting a qualified independent CPA who has experience and knowledge of employee benefit plans. In fact, the Department of Labor (DOL) states in its Selecting an Auditor publication, that
“One of the most common reasons for deficient accountants’ reports is the failure of the auditor to perform tests in areas unique to employee benefit plan audits. The more training and experience that an auditor has with employee benefit plan audits, the more familiar the auditor will be with benefit plan practices and operations, as well as the special auditing standards and rules that apply to such plans.”
In recent years, the DOL has been reviewing auditors’ reports and workpapers to ensure proper audit procedures and testing were applied. If the DOL deems the audit insufficient they can assess fines on the plan administrator or sponsor.
DMLO has a team dedicated specifically to performing employee benefit plan audits. We adhere to strict quality standards in all of our audit engagements and keep up with the ever changing regulatory requirements associated with these plans. We are a member of the AICPA’s Employee Benefit Plan Audit Quality Center, which requires member firms to obtain specific experience in employee benefit plans as well as comply with annual training and monitoring requirements. In addition, staff attend continuing education conferences specific to employee benefit plans on a regular basis.
Whether your employee benefit plan is a defined contribution plan such as a 401k or 403b, a defined benefit plan, or an ESOP, we are ready to work with you, with the expertise and resources to provide a quality audit of the plan and to provide consultation on proper employee benefit plan administration to the plan administrator or plan sponsor. Feel free to contact me or another member of our EBP audit team with questions about your plan’s audit status or any general administration questions.