The U.S. Department of Labor recently sent emails to sponsors of employee benefit plans that require an audit. The email provided guidance on selecting a qualified accounting firm to conduct the audit.
The email is a follow-up to a DOL study released in May that found serious problems with nearly 40% of employee benefit plan audits.
An upside of the study is the DOL found far fewer problems in employee benefit audits conducted by accounting firms with significant experience in the field. Firms that perform dozens of employee benefit audits had a far smaller deficiency rate (12%) compared to the deficiency rate of firms that only audit a handful of plans – a concerning 76% deficiency rate.
The DOL also found that firms that are members of the AICPA Employee Benefit Plan Audit Quality Center performed higher-quality work than nonmember firms. Concannon Miller is a longstanding member of the center.
Our plans are regularly peer reviewed (we’ve never had a finding) and the DOL performed a surprise review of one of our audits just this summer, also which resulted in no findings.
The DOL suggested companies consider the following factors in selecting an accounting firm for their employee benefit audits:
The number of employee benefit plans audited each year, including the types of plans: Concannon Miller regularly audits 30 employee benefit plans each year, including defined benefit, defined contribution, 401k, 403b and health and welfare plans.
The extent of specific annual training received in auditing plans: Concannon Miller holds regular in-house training on employee benefit audits and also attends annual third-party training and many employee benefit plan audit conferences.
The status of CPA licenses with the applicable state board of accountancy: All our licenses are current.
Whether the firm has been the subject of any prior DOL findings or referrals: We’ve never had any DOL findings.
Whether the firm’s employee benefit plan audit work has been recently peer reviewed and if they’ve resulted in any negative findings: As a requirement of being a member of the AICPA Employee Benefit Plan Audit Quality Center, our audits are regularly peer reviewed and we’ve never had a negative finding.
More information about our employee benefit audit services can be found here or our Shareholder in Charge of Employee Benefit Plan Audits Erica Bortz can be reached at firstname.lastname@example.org or 610-433-5501.