Employee Benefit Plan Audit Changes as Early as 2021

ERISA plan audits have new rules with the goal of having more consistency in audit methods and addresses concerns regarding audit quality. The compliance falls to auditors, but the new rules give new roles and responsibilities to plan sponsors they should be aware of, starting in as early as 2021.

Plan sponsors will likely see information reorganized and more details in  ERISA plan financial statement audit reports once SAS 136 goes into effect.

If a sponsor chooses the “limited scope audit” also known as the ERISA Section 103(a)(3)(C) audit, new questions and procedures will need answering.

New Responsibility for Plan Sponsors

Plan sponsors will notice the certifications related to the plan’s asset is a new responsibility.

What a plan sponsor would need to provide to their auditor to acknowledge responsibility for:

• Determining whether the 103(a)(3)(C) audit is permissible and whether the certification meets ERISA requirements
• Maintaining and providing a current plan document
• Preparing and fairly presenting financial statements
• Providing a substantially completed (draft) Form 5500 to the auditor for the auditor’s review prior to the date the physical audit begins.

Learn more about what the new employee benefit plan rules entail for both auditors and plan sponsors as written for the Journal of Pension Benefits by Employee Benefit Plan Practice Leader Anne Morris.