EMPLOYEE BENEFIT PLAN AUDIT BEST PRACTICES · EMPLOYEE BENEFIT PLAN AUDIT BEST PRACTICES Shannon...
Transcript of EMPLOYEE BENEFIT PLAN AUDIT BEST PRACTICES · EMPLOYEE BENEFIT PLAN AUDIT BEST PRACTICES Shannon...
EMPLOYEE BENEFITPLAN AUDIT
BEST PRACTICES
Shannon Black, C.P.A., C.M.A., C.E.B.S.Black & Pinckard, L.L.C.
Joe Lassiter, C.P.A.Pearce, Bevill, Leesburg, Moore, P.C.
QUICK BACKGROUND ON ERISA AUDIT
REQUIREMENTS
Compliance (and more)
Why We Do What We Do?
PLANNING
PLANNING
PLANNING
• Engagement letter (sign it sowe can get started early
• Understand Plan operations and update documentation(change plan provisions, payroll system or service provider, audit scope)
PLANNING
• Key Plan personnel (accounting, HR, payroll, plan administrator. Some do not understand fiduciary duties/responsibilities.)
• Who service providers are and what services they provide (anyone who provides servicesto the Plan)
PLANNING
• Timing of audit fieldwork (the audit takes longer than what you see when we are in the field)
• Obtain census and audit package (what can go wrong here) and select samples.
PLANNING
• SOC1 and investment certification• Discussions with Management• Analytical review (year to year
comparisons)• Financial statement preparation
TESTING (FIELDWORK)
TESTING (FIELDWORK)
• Recalculate gross compensation (why we do that)
• Agree census to payroll and demographics to underlying participant records (DOB, DOH, DOT for vesting and retirement age purposes)
TESTING (FIELDWORK)
• Recalculate EE/ER contributions based on deferral % (obtained from enrollment/change forms or other sources if electronic process)
• Agree EE/ER contribution per census to participant account (CY/PY receivables in and out) –could be posted to wrong participant account
TESTING (FIELDWORK)
• Confirmations (hard copy/email)
• Distribution request forms and evidence of termination (or confirmations) – check with TPA for check copies/forms/1099s if sponsor does not retain
TESTING (FIELDWORK)
• Recalculation of investment income for sample of funds in participant accounts compared to return per Morningstar, Yahoofinance, etc.
• Ascertain that contributions are properly posted to investment selected by participant
TESTING (FIELDWORK)
• Timely submission of contributions to trust (clarity on the rule!!!)
• Loans (if not certified)
• Rollovers (into Plan)
WRAP-UP
WRAP-UP
• Review process• Management
representation letter• Management comments
(suggestions for improvement or errors found)
QUESTIONS
Shannon Black, C.P.A., C.M.A., C.E.B.S.Black & Pinckard, L.L.C.P.O. Box 26384Hoover, AL 35260(205) [email protected]
Joe Lassiter, C.P.A.Pearce, Bevill, Leesburg, Moore, P.C.110 Office Park Drive, Suite 100Birmingham, AL 35223(205) [email protected]
Contact Information: