Federal law requires most employee benefit plans with 100 or more participants must submit an audited financial plan when they file an annual return or report, commonly called a Form 5500. One of the most important fiduciary responsibilities a plan administrator has is selecting an independent qualified public accountant.
How do I select an auditor who is qualified and reliable?
License, experience and professional development—Federal law requires an employment benefit plan auditor to be licensed or certified as a public accountant by a state regulatory authority. In addition to proper licensure, an experienced employee benefit plan auditor with recent employee benefit plan-specific continuing education training should perform the more complicated aspects of the audit procedures and oversee less experienced auditors on the routine tasks.
Independence—an auditor must be independent from the plan and plan management. This ensures the auditor approaches work objectively in order to offer an unbiased opinion about the financial condition and regulatory compliance of the plan. The DOL has established rules of auditor independence. According to these DOL regulations, an audit firm or any of its employees cannot maintain the financial records for the employee benefit plan.
Resources—your auditor’s firm needs to have adequate resources to devote appropriate expertise to the unique and complex aspects of your individual plan. A qualified employee benefit plan auditor has a strong understanding of how specific plans operate and can provide technical support in the event ERISA, DOL or the Internal Revenue Service (IRS) selects your plan for review.
The DOL outlined five specific factors you should examine when selecting an auditor. Click here to see how BerganKDV matches up with the DOL’s recommended qualifications.
Need help with your employee benefit plan audit? Start here.
