Recently, the AICPA Auditing Standards Board (ASB) issued an updated Statement on Auditing Standards that will lead to some audit changes in how employee benefit plans that are subject to ERISA are examined. If you are having an audit performed, it’s important that you understand how the auditor’s report will assess and evaluate your employee benefit plans.
The new Statement on Accounting Standards is designed to help make audits more transparent and improve the auditor reporting model for any audits of ERISA plan financial statements. The reports will be improved partially through new consideration of the specialized nature of many plan operations. The changes to the auditing process will go into effect for financial statements issued on December 15, 2021, so now is the time to prepare. Some accounting firms will be adopting the audit changes earlier, so discuss what you can expect with your professional at MKS&H in advance.
What Can Plan Sponsors Expect?
One of the changes is that plan sponsors will not have more responsibilities, including:
- Assessing if the entity issuing the certification is qualified when getting the audit
- Ensuring the certification meets ERISA requirements
- Acknowledging in writing that all conditions are met
How Will Audit Reports Change?
Plan sponsors can also expect audit changes that will show up in the audit report. The new Statement on Accounting Standards allows sponsors to elect to have an ERISA section 103(a)(3)(C) audit, which was formerly known as a limited scope audit. When they receive the audit opinion, it will include detailed information on the procedures that were performed on certified and noncertified information. It will also include a new basis for the opinion section. The primary goal of these audit changes is to make the audit report more transparent so that plan sponsors and auditors both understand what their obligations are.
In the audit report, you will get access to findings that include things like:
- Any instances of noncompliance or suspected noncompliance
- Findings that are significant and relevant to your organization that arise in the audit process
- Any deficiencies in internal controls that have not been communicated to management yet or acted upon
Maintain Your Bookkeeping and Accounting Records with Help from MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry. We can work with you to determine the best way to update your records, plan for the future, budget and more. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.