The Department of Labor (DOL) has repeatedly found that benefit plan audits performed by firms without employee benefit plan experience show significantly higher deficiency rates. Choosing the right ERISA auditor can help companies avoid compliance issues, penalties, and costly remediation.
Asking the right questions up front is the best way to ensure your plan receives a high-quality, compliant audit.
Key Takeaways:
- The DOL reports higher deficiencies when inexperienced firms audit benefit plans.
- To avoid deficiencies, evaluate an auditor’s experience, including the number of plan audits, plan types, and similar plan complexity.
- Check quality: EBPAQC membership, ERISA training, and peer review results.
- Confirm independence and regulatory compliance, and clarify communication and fees upfront.
Before Hiring an ERISA Auditor, Ask These Questions
Questions About Experience and Specialization
High-risk areas, such as contribution timeliness, eligibility, loans, and distributions, require benefit plan auditors who regularly work with these plans.
Begin by verifying the firm’s depth of experience with benefit plans. Ask:
- How many employee benefit plan audits do you perform each year?
- Which plan types do you specialize in?
- Do you audit plans of a similar size, structure, and complexity to ours?
As Bennie Lewis, CPA, President, Partner at Assurance Dimensions, LLC, notes, “Although retirement plans are great for retention, they’re fraught with rules that businesses need help navigating.”
Questions About Qualifications, Licensing & Quality Controls
A qualified benefit plan auditor should demonstrate a strong commitment to audit quality.
Before engaging, ask:
- Is your firm a member of the AICPA Employee Benefit Plan Audit Quality Center (EBPAQC)?
- Do engagement team members receive ERISA-specific training and CPE?
- Can you explain your latest peer review results?
The DOL encourages plan sponsors to review peer review reports, since they provide independent insight into a firm’s audit quality controls.
Questions About Independence and Regulatory Compliance
Your ERISA auditor must comply with DOL and AICPA independence rules.
Clarify their commitment to compliance by asking:
- How do you maintain independence throughout the engagement?
- Have any of your benefit plan audits been reviewed by the DOL or IRS?
- Do you recommend a limited-scope or full-scope audit for our plan?
Independence is non-negotiable. It’s what allows the auditor to provide objective assurance on behalf of plan participants and stakeholders.
Questions About Communication, Approach & Fees
Strong communication prevents surprises. It also ensures transparency while maintaining expectations.
Ask:
- What risk areas will you focus on and why?
- What documentation do you need from us, and what is your timeline?
- How involved is the engagement partner?
- How is your fee structured?
Assurance Dimensions clients consistently highlight the team’s accessibility. As Julian Sardinas, CPA, Partner at Assurance Dimensions, LLC, explains, “We pride ourselves on quick response times and performing efficient, effective audits.”
Questions About References and Fit
A great auditor helps you understand issues without ever compromising independence.
Request references from similar plans and ask about:
- Timeliness.
- Issue identification.
- Staff continuity.
As Bennie Lewis puts it, “We don’t audit in a bubble or play ‘gotcha.’ Anything we can do to make the process clearer is a good thing.”
How Assurance Dimensions Can Help
Hiring the right accounting firm for your benefit plan audit protects your participants, your organization, and your fiduciary standing. By asking targeted questions to a firm before engaging, plan sponsors can confidently select a qualified partner.
Assurance Dimensions is a full-service accounting firm with deep ERISA expertise. To discuss a compliant, high-quality employee benefit plan audit, contact us today.