Written by Katie Dasta, CPA, Assurance Manager
Oftentimes, the selection of an auditor for an employee benefit plan audit is an after-thought. It might be viewed as only an add-on service to the corporate audit work or the decision is made based on selecting the audit firm with the lowest fee quote. However, in reality, one of the most important duties of the plan administrator is to hire an independent qualified public accountant to perform the annual audit. As stated on the United States Department of Labor’s website, “A quality audit will help protect the assets and the financial integrity of your employee benefit plan and ensure that the necessary funds will be available to pay retirement, health, and other promised benefits to your employees. A quality audit also will help you carry out your legal responsibility to file a complete and accurate annual return/report for your plan each year. Because an incomplete, inadequate or untimely audit report may result in penalties being assessed against you as the plan’s administrator, selection of an experienced and reliable auditor is very important.”
One of the key considerations is to ensure that the firm engaged to audit the employee benefit plan has experience in this type of work. There are many audit considerations unique to employee benefit plans. The more training and experience that an audit firm has with employee benefit plans, the more familiar the audit firm will be with benefit plan practices and operations, as well as the special auditing standards and rules that apply to such plans. A well performed employee benefit plan audit can assist the plan administrator in detecting deficiencies in the plan – either deficiencies in the internal control processes or deficiencies in the operation of the plan. Identifying these deficiencies as part of a well performed employee benefit plan audit will help protect the plan as well as the assets of the plan participants.
First and foremost when selecting an auditor, it is imperative that the auditor be licensed or certified as a public accountant by a State regulatory authority. Another consideration is whether the audit firm is a member of the ACIPA’s Employee Benefit Plan Audit Quality Center. Additionally, the number of employee benefit plan audits performed annually by the firm as well as the training and proficiency of the audit staff should be evaluated. GBQ has significant experience auditing a wide variety of employee benefit plans, auditing more than 90 plans a year. GBQ is also a member of the AICPA Employee Benefit Plan Audit Quality Center. We would be pleased to discuss any further questions regarding employee benefit plan audits that you might have.