Art of the Qualified Plan Audit

When I was a Teaching Assistant in College, group projects would inevitably result in complaints that some students were not pulling their weight.

Posted By: Maria Hurd, CPA, RPA What Do You Check to Indicate Your Client’s Auditor Performed a Limited Scope Audit On Your Mark, Get Set, GO!, Or Don’t Go….It’s Up to You! The AICPA postponed the mandatory effective date of the new audit standard, SAS 136, until next year, but the DOL had already updated … Continued

In Summary Conflict Exists in Reporting Standards: Discrepancies arise because auditors must adhere to their financial reporting framework (GAAP/FinREC), which often clashes with the cash basis accounting required by the DOL/IRS 5500 instructions, particularly concerning the netting of corrective contributions versus reporting them as a cash-basis expense on line 2f. Auditors and TPAs Must Follow … Continued

In Summary Auditor Selection Responsibility: Plan sponsors must evaluate the qualifications of the CPA firm hired for a retirement plan audit, a challenging task given the complexity of the work. The Department of Labor (DOL) and AICPA provide resources to assist in this selection, emphasizing that the size of an audit practice and its commitment … Continued

In Summary Certified Value Might Not Be Valid When Limited Scope Certification Is: An ERISA Section 103(a)(3)(C) certification guarantees completeness and accuracy based on a financial institution’s ordinary business records, but this does not assure compliance with GAAP. If the custodian’s “best available information” is not fair value, a certified value is provided that auditors … Continued

Posted By Maria T. Hurd, CPA How Big Can a Retirement Plan Be and Still Qualify for the Small Plan Audit Exemption? “Define Large.” It is a question I often get from advisors hoping to get their clients out of a retirement plan audit. Until now the answer has been simple: 100 participants is the … Continued

Posted By Stacey Snyder, CPA, QKA, TGPC If you’re preparing for your first 401(k) plan audit, you may be wondering what information the auditor will need for the audit. In order to help you prepare, we have created a template of an audit information request which conveys the overall level of detailed verification required in … Continued

In Summary New Comparability Plan Design Is a Technique: Cross-testing is used in new comparability profit-sharing plans to legally maximize retirement savings contributions for owners and highly compensated employees (HCEs). This is achieved by comparing the Equivalent Benefit Accrual Rate (EBAR) at retirement age, rather than the current contribution rate, as the testing mechanism. EBAR … Continued

Posted By: Stacey Snyder, CPA, QKA, TGPC If you’ve just been informed that your 401(k) plan needs an audit, you probably have many questions if you have never been through a 401(k) audit. Hopefully by answering the five Ws (Who? What? When? Where? Why?), we’ll cover most of your questions. WHO? – Who Audits a … Continued

Posted by Tyler Starr, CPA The American Institute of Certified Public Accountants’ (AICPA) Auditing Standards Board (ASB) issued the Statement on Standards for Attestation Engagements (SSAE) No. 19, Agreed-Upon Procedures Engagements, in December 2019. SSAE 19 supersedes SSAE 18 AT-C section 215 of the same name and also amends certain provisions of SSAE 18 section … Continued