New Proposal for Employee Benefit Plan Audits

The Auditing Standards Board of the American Institute of Certified Public Accountants recently issued a proposed Statement on Auditing Standards (SAS) that, if adopted, would affect audits of employee benefit plans subject to the pension law (ERISA). Particularly affected would be limited-scope audits, for which DOL regulations allow auditors to rely on certain statements and information prepared by regulated banks or similar institutions or insurance carriers, provided that those entities certify the statements to be “complete and accurate.”

Key elements of the proposal include additional testing with respect to certain aspects of the plan document, changes in the auditor’s report for limited scope audits, expanded written representations by management, and considerations relating to the Form 5500 filing. 

Plan sponsors should be aware of possible effects of the exposure draft, including the potential for increased auditing costs. In addition, sponsors should ensure that their own procedures and controls are well documented and followed and that any service agreements clearly delineate the respective responsibilities of each party.

The proposed SAS would be effective for audits of financial statements for periods ending on or after December 15, 2018.

 

Lifetime Benefit Solutions is a national leader in developing and delivering health-related benefits plans – partnering with our customers to deliver value and promote employee health and wellness.

Flexible employee benefit programs, intelligently and creatively customized to your company’s unique situation.