Insights Magazine Volume IX - Page 13

Download a list of questions for plan administrators to ask prospective auditors at brownsmithwallace.com/ EBP-audit-questions auditors don’t have any financial interests in the plan (or the plan administrator) that would affect their ability to render an objective, unbiased opinion about the plan’s financial statements. The DOL doesn’t consider a plan auditor to be independent if the audit firm or any of its employees also maintain the plan’s financial records. Qualified auditors will have expertise and training in the following areas: plan mergers, freezes or terminations; and changes in service organizations — may complicate plan reporting. When evaluating potential auditors, discuss the auditor’s work for other benefit plan clients and obtain references. Also review the audit team’s continuing professional education records over the last three years to determine whether they possess recent benefit-plan-specific training. • Definition of compensation as it relates to contributions or plan obligations • Eligibility considerations • Timeliness of plan contributions • Transactions prohibited under ERISA • Fair value of plan assets covered by the audit • Effects plan provisions may have on benefit payments The AICPA briefing paper includes recommendations on how to put together a comprehensive request for proposal (RFP) that can be used to evaluate bidders — and helps potential auditors create a proposal that addresses the plan’s specific needs. Comprehensive RFPs provide detailed explanations of the audit engagement, including its objectives, scope, special considerations and expected timeline. • Allocations to participant accounts, if applicable Protecting Your Assets • Unique aspects of plan obligations • Issues that may affect the plan’s tax status In addition to understanding the DOL, ERISA and IRS regulations that apply specifically to benefit plans, qualified auditors must grasp how other matters — such as changes to the plan document; Not every CPA is qualified to audit employee benefit plans. These engagements require specialized training and experience. Plan administrators who prepare comprehensive RFPs to systematically evaluate prospective auditors create a paper trail that documents their commitment to quality and due care. Matthew Powell CPA Partner, Audit Services Brown Smith Wallace 314.983.1224 mpowell@bswllc.com 11