Did you know there are approximately 82,500 benefit plans which combined hold approximately $63 trillion in plan assets? The issue is audit quality can be problematic, which is why the Department of Labor (DOL) has created a task-force to conduct inspections of auditor’s work papers for employee benefit plans.
Department Of Labor Audits: Employee Benefit Plans
Did you know there are only 7,300 CPA firms doing the audits for all of the 82,500 plans? Of those firms, only 50% of them audit 1 or 2 plans. So, it’s not surprising that inspections to date have resulted in a deficiency rate of 32%. Some of the most common deficiencies noted from inspections include:
- Overreliance on SOC 1 reports
- Overreliance on work performed by actuaries and appraisers
- Overreliance on predecessor auditor’s work
- Lack of professional skepticism
- A checklist mentality
Five employee benefit plans audited by BKM Sowan Horan were selected for evaluation during 2014. For each audit, the Firm received letters from the DOL noting there was no material reporting or auditing deficiencies. We attribute these results to our level of experience with large plans, dedication to training, and commitment to performing quality audits on all engagements.
Some may view employee benefit plan audits as compliance driven. However, we believe that we can add value due to our level of experience with large plans as well as our expanded interaction with your other trusted advisors.
We will help you stay in compliance with ERISA and assist with your annual filing requirements. Give us a call at 214-545-3966 or email us at [email protected].