After the Department of Labor released their May 2015 Report, which pointed to the poor quality of employee benefit plan audits, the American Institute of Certified Public Accountants (AICPA) has proposed changes to the standards of these audits in the exposure draft of Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.

The original deadline to comment on this exposure draft was August 21, 2017, but it has recently been extended to September 29, 2017.

What did the May 2015 report address?

As noted in the May 2015 DOL report, of the 400 plan audits by 232 CPA firms evaluated by the DOL, 39 percent had one or more major deficiencies and 17 percent of the auditor’s reports were not in compliance with requirements.

As a result, the AIPCA created a plan to improve benefit plan audits, which includes proposed changes to the audit report, including addressing the auditor’s responsibilities on forming an opinion on the benefit plan financial statements and other content of the report.

Importance of choosing a quality auditor

The proposed auditing standard changes stresses the importance of obtaining an auditor with commitment to the employee benefit plan practice with a team of professionals who understands ERISA, DOL and IRS requirements and can provide a quality audit. Think your current auditor is lacking? Check out our blog, “5 Signs Your Employee Benefit Plan Might Need a New Auditor”.

How to comment

Don’t miss your chance to submit a comment on the draft. All comments should be addressed to Sherry Hazel at Sherry.Hazel@aicpa-cima.com.

Questions? Contact any member of our Employee Benefit Plan Team.