Description
Mayer
Hoffman M ay e r H o f f man M c C ann P. C . – A n I ndependent C PA Fi r m
McCann P.C.
An Independent CPA Firm
Employee Benefit Plan
Tips for Selecting an Auditor
For more than 20 years, the Department of Labor (DOL)
has been reviewing and regulating Employee Benefit Plan
(EBP) audits. And for just as long, they have found that a
significant number of these audits do not meet the DOL
requirements.
Due to continued findings of the ongoing quality review programs, the DOL continues to increase regulation of EBP audits. Now more than ever, plans with more than 100 participants must make the important decision of choosing the right accounting firm to perform their employee benefit plan audit. With regular changes in the rules and filing requirements, it is imperative companies choose an auditor who specializes in employee benefit plans.
Otherwise it could be troublesome, or in the worst cases, costly. Common EBP audit deficiencies The deficiencies typically found by the DOL are a result of the auditor not conducting tests in areas unique to employee benefit plans. Oftentimes, this is because of a lack of involvement in the Employee Benefit Plan Audit Quality Center and a lack of training and dedicated resources. Plan administrators should be sure that their auditor has addressed these common deficiencies: • Have plan assets covered by the audit been fairly valued? • Are plan obligations properly stated and described? • Were contributions to the plan received timely? • ere benefit payments made in accordance with W plan terms? • Were participant accounts fairly stated, if applicable? • Was participant eligibility tested? • ere there issues identified that may impact the W plan’s tax status? • ere any transactions prohibited under EBP audits W properly identified? • Was testing done on investment income allocation? Important questions you should be asking your EBP auditor: Choosing an auditor who emphasizes precision and continually tests for compliance with EBP audit requirements can help protect the financial integrity of an employee benefit plan. It will also aid companies in fulfilling their obligation to file a timely and accurate annual return/report for the plan each year. Several questions that every company should ask to gauge whether EBP audits are a priority with their auditor’s firm: 1. s your auditor free of any financial interests in I the plan or plan sponsor? It is imperative that the auditor of an employee benefit plan be independent. They must not have any financial interests in order to issue an unbiased, objective opinion. 2. How many entry-level employees will be involved in auditing our plan? In an effort to reduce audit costs, often times a less experienced auditor is assigned to perform routine audit procedures.
In this instance, the company should be sure that an experienced employee benefit plan auditor supervises and reviews the work and performs the more complicated procedures. 3. Do you attend national EBP conferences? Audit firms who specialize in employee benefit plan audits should be sending key professionals to conferences such as ones hosted by the DOL or American Institute of Certified Public Accountants for specialized training. • Was payroll data tested? (Continued on page 2) . M ay e r H o f f man M c C ann P. C . – A n I ndependent C PA Fi r m 4. How many plans does your firm audit? Firms that only perform a small number of employee benefit plan audits often aren’t spending time staying up-to-date on the latest technical standards. 5. Does your firm have a specialized practice group for EBP audits? Not having a dedicated team of professionals to perform EBP audits means not having an efficiently performed audit and not benefitting from the skilled expertise that dedicated professionals provide, including a review to ensure your plan is in compliance with the latest regulations. 6. s your firm a member of the AICPA’s Employee I Benefit Plan Audit Quality Center? Members of this quality center are committed to the ongoing compliance and testing requirements of EBP audits. Their voluntary membership in the center is an indicator of their commitment to providing quality EBP audits. 7. Does your firm have a record of clean opinions from the AICPA, PCAOB or DOL inspections? Making significant changes as a result of regulatory inspections could mean a lack of experience and proper level of expertise in charge of performing your plan’s audit. 8. n addition to the audit, what other guidance I can you give us? In addition to issuing an opinion and report on the plan’s financial statements, the firm should report on any significant problems encountered, as well as suggest ways to improve internal controls and plan operations. Mayer Hoffman McCann’s EBP Audit Experience: Mayer Hoffman McCann P.C. performs nearly 1,000 audits of qualified plans annually.
In more than 20 years of performing EBP audits, our approach has emphasized quality, thoroughness and precision at an affordable price. In addition to the audit, it is our goal to provide added value to our clients by assisting them in a better understading of their plans and the related filing and compliance requirements. MHM was the fifth firm to join the American Institute of Certified Public Accountant’s (AICPA) Employee Benefit Plan Audit Quality Center, which was founded in March 2004 and now has over 2,000 members. This means we were one of the first firms to declare our commitment to providing quality employee benefit plan audits, have established firm-wide training and quality control programs, and perform annual internal inspections. With our resources and expertise, our clients can be assured that their EBP audit will be performed to the level and value of service they expect. About Mayer Hoffman McCann P.C. Mayer Hoffman McCann P.C.
is a national, independent CPA firm specializing in high quality attest services, including audits, reviews and compilations. With over 30 locations across the country, our national presence provides our clients with stability and access to extensive resources — all with first-rate responsiveness and personal attention. Mayer Hoffman McCann P.C. is registered with the PCAOB and is a member of the AICPA’s Center for Audit Quality, the Employee Benefit Plan Audit Quality Center and the Governmental Audit Quality Center. our roots run deep TM ® 877.887.1090 • www.mhmcpa.com ©2015 Mayer Hoffman McCann P.C.
All rights reserved. .
Due to continued findings of the ongoing quality review programs, the DOL continues to increase regulation of EBP audits. Now more than ever, plans with more than 100 participants must make the important decision of choosing the right accounting firm to perform their employee benefit plan audit. With regular changes in the rules and filing requirements, it is imperative companies choose an auditor who specializes in employee benefit plans.
Otherwise it could be troublesome, or in the worst cases, costly. Common EBP audit deficiencies The deficiencies typically found by the DOL are a result of the auditor not conducting tests in areas unique to employee benefit plans. Oftentimes, this is because of a lack of involvement in the Employee Benefit Plan Audit Quality Center and a lack of training and dedicated resources. Plan administrators should be sure that their auditor has addressed these common deficiencies: • Have plan assets covered by the audit been fairly valued? • Are plan obligations properly stated and described? • Were contributions to the plan received timely? • ere benefit payments made in accordance with W plan terms? • Were participant accounts fairly stated, if applicable? • Was participant eligibility tested? • ere there issues identified that may impact the W plan’s tax status? • ere any transactions prohibited under EBP audits W properly identified? • Was testing done on investment income allocation? Important questions you should be asking your EBP auditor: Choosing an auditor who emphasizes precision and continually tests for compliance with EBP audit requirements can help protect the financial integrity of an employee benefit plan. It will also aid companies in fulfilling their obligation to file a timely and accurate annual return/report for the plan each year. Several questions that every company should ask to gauge whether EBP audits are a priority with their auditor’s firm: 1. s your auditor free of any financial interests in I the plan or plan sponsor? It is imperative that the auditor of an employee benefit plan be independent. They must not have any financial interests in order to issue an unbiased, objective opinion. 2. How many entry-level employees will be involved in auditing our plan? In an effort to reduce audit costs, often times a less experienced auditor is assigned to perform routine audit procedures.
In this instance, the company should be sure that an experienced employee benefit plan auditor supervises and reviews the work and performs the more complicated procedures. 3. Do you attend national EBP conferences? Audit firms who specialize in employee benefit plan audits should be sending key professionals to conferences such as ones hosted by the DOL or American Institute of Certified Public Accountants for specialized training. • Was payroll data tested? (Continued on page 2) . M ay e r H o f f man M c C ann P. C . – A n I ndependent C PA Fi r m 4. How many plans does your firm audit? Firms that only perform a small number of employee benefit plan audits often aren’t spending time staying up-to-date on the latest technical standards. 5. Does your firm have a specialized practice group for EBP audits? Not having a dedicated team of professionals to perform EBP audits means not having an efficiently performed audit and not benefitting from the skilled expertise that dedicated professionals provide, including a review to ensure your plan is in compliance with the latest regulations. 6. s your firm a member of the AICPA’s Employee I Benefit Plan Audit Quality Center? Members of this quality center are committed to the ongoing compliance and testing requirements of EBP audits. Their voluntary membership in the center is an indicator of their commitment to providing quality EBP audits. 7. Does your firm have a record of clean opinions from the AICPA, PCAOB or DOL inspections? Making significant changes as a result of regulatory inspections could mean a lack of experience and proper level of expertise in charge of performing your plan’s audit. 8. n addition to the audit, what other guidance I can you give us? In addition to issuing an opinion and report on the plan’s financial statements, the firm should report on any significant problems encountered, as well as suggest ways to improve internal controls and plan operations. Mayer Hoffman McCann’s EBP Audit Experience: Mayer Hoffman McCann P.C. performs nearly 1,000 audits of qualified plans annually.
In more than 20 years of performing EBP audits, our approach has emphasized quality, thoroughness and precision at an affordable price. In addition to the audit, it is our goal to provide added value to our clients by assisting them in a better understading of their plans and the related filing and compliance requirements. MHM was the fifth firm to join the American Institute of Certified Public Accountant’s (AICPA) Employee Benefit Plan Audit Quality Center, which was founded in March 2004 and now has over 2,000 members. This means we were one of the first firms to declare our commitment to providing quality employee benefit plan audits, have established firm-wide training and quality control programs, and perform annual internal inspections. With our resources and expertise, our clients can be assured that their EBP audit will be performed to the level and value of service they expect. About Mayer Hoffman McCann P.C. Mayer Hoffman McCann P.C.
is a national, independent CPA firm specializing in high quality attest services, including audits, reviews and compilations. With over 30 locations across the country, our national presence provides our clients with stability and access to extensive resources — all with first-rate responsiveness and personal attention. Mayer Hoffman McCann P.C. is registered with the PCAOB and is a member of the AICPA’s Center for Audit Quality, the Employee Benefit Plan Audit Quality Center and the Governmental Audit Quality Center. our roots run deep TM ® 877.887.1090 • www.mhmcpa.com ©2015 Mayer Hoffman McCann P.C.
All rights reserved. .
