In November, the Department of Labor (DOL) began sending emails to plan sponsors alerting them of the importance of obtaining a quality audit from a qualified and experienced CPA firm. The timing of the DOL communication is intended to coincide with the period when many plan audit contracts are renewed or out for proposal.
The Department of Labor letter refers to the recent DOL audit quality study which found deficiencies in nearly 40% of employee benefit plan audits (DOL study found at www.dol.gov/ebsa). The DOL letter also states 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.
According to the DOL study, CPA firms that were members of the AICPA Employee Benefit Plan Audit Quality Center tended to produce audits that have fewer audit deficiencies. Dean Dorton is a member of the AICPA Employee Benefit Plan Audit Quality Center and audits nearly 100 plans annually, including defined benefit, defined contribution and health and welfare plans. Over the past few years, several of the plans we audited were inspected by the DOL with no significant findings.
For more information, contact Jim Tencza, Director of Assurance Services, at email@example.com.