Top 5 Key Insights from DOL’s Employee Benefits Audit Quality Study
In November 2023, the Employee Benefits Security Administration (EBSA) of the US Department of Labor (DOL) released its fourth evaluation of the audit work conducted by independent qualified public accountants. This evaluation specifically scrutinizes the performance of audits for employee benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) during the 2020 filing year, corresponding to plan years commencing in 2020. Notably, this evaluation pertains to the period preceding the implementation of Statement on Auditing Standards (SAS) No. 136, which dictates the criteria for forming opinions and reporting on financial statements of employee benefit plans subject to ERISA. By focusing on the 2020 filing year, the assessment enables a comparative analysis with previous evaluations.
Here’s a breakdown of the Top 5 key findings.
Conclusion: Choose Wisely
While strides have been made in reducing deficiency rates, discerning the selection of audit firms remains paramount for plan administrators. Beyond relying solely on peer reviews, assessing the volume of audits undertaken and the firm’s affiliation with professional bodies such as the Quality Center proves instrumental in ensuring audit efficacy.
- Verify the firm’s membership status in the Quality Center via the AICPA’s official platform.
- Ask about the number of plan audits they’ve handled.
- Inquire about any specific concerns from recent peer reviews or DOL inspections related to employee benefit plans.
The BMF Difference
Given the results of this study, BMF underscores its enduring dedication to audit excellence. Our steadfast commitment to audit quality assumes heightened significance in light of these findings. As a firm, BMF audits well over 100 employee benefit plans. And since the year of its original founding, BMF has remained an active member of the AICPA’s Employee Benefit Plan Audit Quality Center and, in fact, one of our partners is a past member of their executive committee. This affiliation empowers our audit team with ongoing access to robust resources, fostering the maintenance of high-caliber audit standards and technical proficiency. This unwavering commitment is a cornerstone in delivering dependable and compliant employee benefit plan services to our valued clients, aligning seamlessly with DOL mandates and requirements.
We audit and/or prepare the appropriate tax filing and summary annual reports for employee benefit plans including reports attached to Form 5500 and health and welfare plan trusts filing on Form 990, public companies with 11-K filings and plans with as few as 100 or as many as nearly 50,000 participants and several billion dollars in assets.
Our commitment to maintaining high quality and technical expertise is evidenced by our training and supervision of staff, our demonstrated continuity of staff on plan audit engagements, the high level of our participation (as both participants and speakers) in national and state conferences, and the positive marks of our Peer Review and PCAOB inspection results.
If your employee benefit plan is required to have an audit, it is your duty to hire an auditor who is licensed or certified as a public accountant by a state regulatory authority. We are available to discuss our services, experience and quality and how we can best serve the needs of your compliance requirements.
James E. Merklin?>
CPA/CFF, CFE, CGMA, MAcc
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