The U.S. Department of Labor (DOL) oversees the annual audits of more than 81,000 employee benefit plans. Recently, the DOL sent out a letter (via email) to tens of thousands of benefit plan administrators regarding audit quality. Perhaps you received one yourself.
The letter went out because the DOL is deeply concerned that a significant number of benefit plan audits include deficiencies that, in their words, “put $653 billion and 22.5 million plan participants and beneficiaries at risk.”
The letter stresses the importance of “selecting a qualified CPA who has the expertise to perform an audit in accordance with professional auditing standards is a critical responsibility in safeguarding the plan’s assets and ensuring compliance with ERISA’s reporting and fiduciary requirements.”
It goes on to state that “employee benefit plan audits have unique audit and reporting requirements and are different from other financial audits, and that substandard audit work can be costly to plan administrators and sponsors.”
The DOL has outlined several factors that indicate a CPA firm is qualified to perform a benefit plan audit, including:
- The number of employee benefit plans the firm audits each year, along with the type of plans
- The extent of annual training conducted in auditing benefit plans
- Status of a CPA’s license with their state board of accountancy
- Whether the firm has been subject to any prior DOL findings, or has been referred to the state board or AICPA for investigation
- Whether the firm’s benefit plan audit work has been “peer reviewed” by another CPA firm
Gray, Gray & Gray is happy to report that, as part of the nationwide assessment of audit quality, our firm received a letter from the DOL Office of the Chief Accountant stating that our work fully complied with professional auditing standards and contained no deficiencies. This reflects our investment in experienced audit personnel and ongoing training to keep pace with the evolving nature of the benefit plan audit process. Learn more about Gray, Gray & Gray’s “clean audit” report from the DOL here.
If you have questions about your company’s employee benefit plan audit, please contact Gray, Gray & Gray at (781) 407-0300 or visit our Employee Benefit Plan Audit web page.
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