ERISA, DOL, and AICPA Audit Quality · PDF fileNCACPA EBP Conference May 7, 2014 ERISA, DOL,...
Transcript of ERISA, DOL, and AICPA Audit Quality · PDF fileNCACPA EBP Conference May 7, 2014 ERISA, DOL,...
NCACPA EBP Conference
May 7, 2014
ERISA, DOL, and AICPA Audit Quality Initiatives
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Ian MacKay, CPA
Director EBPAQC
American Institute of CPAs® Employee Benefit Plan Audit Quality Center
ERISA Celebrates 40 Years!
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• Gerald Ford signed ERISA into law on Labor Day 1974
• First Form 5500 in 1975 with annual audit requirement
American Institute of CPAs® Employee Benefit Plan Audit Quality Center
At a Glance- Then and Now
Mid-1970’s 40 Years Later Number of US workers 90 million 150 million
Employees participating in employer-sponsored plans
44 million (1975)
129 million (2011)
Number of defined benefit plans 103,000 45,000
Number of defined contribution plans 207,000 638,000
Total assets in private retirement plans $164 billion $13 trillion
Life expectancy at birth- male 67 76
Life expectancy at birth- female 75 81
Savings rate 13% 4.3%
Worker-to-social security retiree ratio 3.7 2.9
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American Institute of CPAs® Employee Benefit Plan Audit Quality Center
Growth of ERISA Plan Audits
(>100 Participants)
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0
10000
20000
30000
40000
50000
60000
70000
1975 1980 1985 1990 1995 2000 2005 2010
Defined Benefit
Defined Contribution
Congress added IRC section 401(k) in 1978
Source: DOL 2011 Form 5500
American Institute of CPAs® Employee Benefit Plan Audit Quality Center
Center started in March 2004
Reception for Designated Partners at the May 13-15
National EBP Conference (Wynn Resort- Las Vegas)
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EBPAQC Celebrates 10 Years!
American Institute of CPAs® Employee Benefit Plan Audit Quality Center
EBPAQC Membership Growth
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0 159
1060 1257
1444
1689 1877
2057 2206 2274 2310
American Institute of CPAs® Employee Benefit Plan Audit Quality Center
EBPAQC vs. non-EBPAQC firm audits
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67,533 audits (82%)
15,045 audits EBPAQC members
(2,310 firms)
Non-EBPAQC firms (5,048 firms)
Source: DOL 2011 Form 5500
82,579 ERISA audits
American Institute of CPAs® Employee Benefit Plan Audit Quality Center
Use Your EBPAQC Resources
EAlerts
Webinars
Website
Member-to-member Forum
Resource Centers
Tools
Primers
Plan Advisories
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American Institute of CPAs® Employee Benefit Plan Audit Quality Center
ERISA Audit Quality “Ingredients”
Qualifications
• Licensed and independent (ERISA requirements)
• Code of Professional Conduct (AICPA)
Standards
• AICPA Firm Quality Control Standards
• GAAS/AICPA EBP Audit and Accounting Guide
Monitoring
• Peer review (ERISA audits are “must select”)
• DOL reviews (PCAOB for Form 11-k’s)
Enforcement
• AICPA Professional Ethics investigations
• State Boards of Accountancy (license)
Commitment
• EBPAQC
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American Institute of CPAs® Employee Benefit Plan Audit Quality Center
Peer Review Findings- ERISA Audits
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American Institute of CPAs® Employee Benefit Plan Audit Quality Center
DOL Audit Quality Study
Statistical sample of 400 ERISA audits in 2011
• Nearly half the audits selected for review performed by firms
with very few ERISA audits
• Study completed later this year
What do we expect DOL to find?
AICPA actions to enhance audit quality
• EBPAQC Executive Committee and Peer Review Board
recommendations - Increased quality control standards
- Enhanced monitoring
- Best practices tools
- Communications
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American Institute of CPAs® Employee Benefit Plan Audit Quality Center
FASB Advocacy on
EBP Accounting and Reporting
EBPAQC and Expert Panel engaged in substantial advocacy efforts
Goal: Raise FASB awareness about the uniqueness of employee
benefit plan financial statements, including their purpose, users and
preparers.
Observations about difficulties encountered in practice
• 26 page discussion memorandum (“Bucket List”) that identifies areas in
current accounting affecting EBPs that are
- conflicting, redundant, irrelevant, or
- incomplete due to the specialized characteristics of plans.
- See Dec 12, 2013 EBPAQC Alert #309 for link to discussion
memorandum
Result: FASB has agreed to take on a research project on EBP
financial reporting issues.
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