Nine Employee Benefit Plan Audit Tips

Well it’s that time of year again…time to dust off those participant files and prepare for the employee benefit plan audit season. As a firm who takes pride in our efficiencies with employee benefit plan audits, here are some tips that we hope will help ensure your retirement plan audit goes smoothly and meets your goals now and in the future:

Nine audit tips

  1. Meet with your accounting/finance group early in the year and discuss how the audits will be staffed and supported.
  2. Prepare throughout the year the schedules and information you know will be requested for the year-end audit including:
    Employee files:

    • Do they contain proper documentation for verification of benefit eligibility/ineligibility?
    • Are signed participant forms (i.e. enrollment, beneficiary designation, investment allocation, etc.) contained within?
    • Plan documents. Some documents that might be required include:
    • Signed adoption agreements
    • Signed amendments
    • Signed service provider agreements
    • Summary plan description
    • Current surety/fidelity bond

    Revisit the plan document to ensure the plan is operating in accordance with the provisions contained therein.

    • If your plan is an ESOP, consider reviewing the allocation calculation spreadsheet for clarity.
    • Gather participant and plan-wide information (plan investment balances and activity) for prior plan years.
  3. Have a kick-off meeting with the auditors and your accounting/finance group well before the audit begins to set expectations, goals and timelines.
  4. Manage what will be audited. Some things are standard and some may not be identified, but represent an area that needs review in your opinion. Remember the audit should make the plan processes even better and afford more protections for the participants and the company.
  5. Hold frequent status meetings to ensure the audit is on track.
  6. Keep your senior management informed of the status as well as any potential areas of concern.
  7. Stuff happens, so allow extra time in your timeline for unexpected setbacks.
  8. Learn from the findings and use this knowledge to improve your internal controls and to better manage your vendors.
  9. Hold a debriefing meeting as soon as possible after the reports are issued. Taking some time to organize and prepare for the audit now will be well worth the effort when audit time comes.

If you have any questions or concerns about preparing for an employee benefit plan audit, please feel free to contact Jea Song, CPA, Partner at 847-267-9600, jsong@waradydavis.com.

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