We at LSL CPAs want our potential clients to be armed with the information needed to make an informed decision.
Below is some of the essential information you need to know about the ERISA benefit plan audit services we provide.
What is an audit engagement letter?
In preparation for your benefit plan audit, the auditor will prepare a contract, referred to as an “engagement letter,” describing the work to be performed, the timing of the audit, and the fee schedule. It will also describe the responsibilities of all parties, the auditor and the plan sponsor. You will need to review this letter carefully and resolve any questions prior to engagement of our services.
What is the difference between a limited scope vs. a full scope benefit plan audit?
The statutory and regulatory requirements for auditing an ERISA employee benefit plan are unique from other company and entity audits. With ERISA’s authorization of the limited scope audit, a plan administrator may choose to have the plan audited in a manner that would not otherwise be consistent with Generally Accepted Auditing Standards. Generally Accepted Auditing Standards are sets of standards against which the quality of audits are performed and may be judged.
Federal law does permit the administrator of an employee benefit plan to limit a benefit plan audit when the benefit plan assets are held by banks or insurance companies and written certifications are provided by the institutions holding those assets.
Here is how the Department of Labor defines the differences between a Full Scope Audit and a Limited Scope Audit (click for larger version):
Source: Department of Labor, Employee Benefit Plan Auditing and Financial Reporting Models (2010)
Please consult with the benefit plan audit team at LSL to help determine which scope of work is appropriate for your company.
Will my company need to furnish or prepare documents for the benefit plan auditor?
As the administrator of a company’s benefit plan, it is your responsibility to maintain the financial records of the plan and other required documentation. Many of these benefit plan records will need to be available for review in the course of an ERISA benefit plan audit. If a third party service provider maintains your company’s benefit plan records, you will need to arrange for the benefit plan audit team at LSL CPAs to have access to these records.
The Success of Your Benefit Plan Audit
The goal of the LSL benefit audit team is to execute a successful audit for your company. To learn more please contact the LSL CPAs employee benefit plan audit team leader, Maria T. Arriola at (714) 569-1000.
*This information is a small portion of what is available at the Department of Labor website