We are results driven and deliver results. Our audits will be completed on an agreed upon schedule with minimal disruption to daily business activities. The audit schedule will be regularly communicated and updated to eliminate surprises.
If your employee benefit plan is required to be audited, hiring an independent and well-qualified auditor to do it not only makes good business sense, the Department of Labor (DOL) expects it. To satisfy your fiduciary obligations, selection of a quality auditor is critical.
The cost of the audit will certainly be a factor. Other factors include the quality of the firm and individuals performing the audit, the experience of the audit team and the timeliness of the work product. The factors should be taken together when choosing a candidate.
The retirement plan financial reporting and audit environment is unique in many respects. Benefit plan auditors must have knowledge of the Internal Revenue Code, The Employee Retirement Income Security Act (ERISA), and, of course, the nature of plan and how it operates. These unique aspects can add significant complexity to an employee benefit plan audit. This complexity requires you to evaluate key indicators that demonstrate the auditor’s capacity, competence and expertise.
Several of the key indicators are:
- How many employee benefit plan audits does the firm currently perform? If a firm is performing a large number of plan audits, it is indicative that they have invested resources and developed a core group of auditors to specialize in benefit plan audits.
- Range of employee plan audits. Understand the types of audits performed by the audit firm. Does the audit firm have firm-wide Inventory of ERISA Audits by type (defined contribution, defined benefit, ESOP, Health and Welfare plans, etc?)
- Staffing and Scheduling. Who will be on the engagement team and how many other benefit plan audits are your audit team members currently, performing? It can be common to have new staff each year on these types of audits – make sure the firm is committed to staffing the engagements with auditors that specialize in benefit plans, and are committed to staffing continuity annually.
- Training Curriculum. How does the firm educate their staff with new regulations and make sure that they are up to date with regulatory changes? Do they offer training to their clients on new regulations and thought leadership?
- Membership in EBPAQC. Is the audit firm a member of the Employee Benefit Plan Audit Quality Center (EBPAQC)? The American Institute of Certified Public Accountants (AICPA) has established the EBPAQC. The EBPAQC maintains a directory of employee benefit plan auditors who have agreed to meet specific experience, training and practice monitoring requirements.
- Audit Tools and Resources. Does the audit firm work in a paperless environment? What safeguards are in place to ensure that data security and storage is established? Does the firm have ERISA Quality Control Policies and Procedures? How does the firm ensure their internal policies are followed and that a quality audit is performed?
- Self-Inspections. Does the audit Firm perform self-Inspections?
Not all auditors and audit firms are created equal. Understanding these key items will assist in ensuring your Plan audit is not only the right cost but that your audit firm has the right qualifications and your audit team is top notch.