{"id":6021,"date":"2026-02-20T09:18:17","date_gmt":"2026-02-20T09:18:17","guid":{"rendered":"https:\/\/www.acobloom.com\/us\/?p=6021"},"modified":"2026-03-10T05:01:54","modified_gmt":"2026-03-10T05:01:54","slug":"employee-benefit-plan-audit","status":"publish","type":"post","link":"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/","title":{"rendered":"Employee Benefit Plan Audit:\u00a0Key Insights from the AICPA Audit Guide\u00a0"},"content":{"rendered":"\n<p>Businesses&nbsp;with&nbsp;over&nbsp;100&nbsp;employees&nbsp;that have&nbsp;account balances at the beginning of the&nbsp;financial&nbsp;year&nbsp;are required to&nbsp;conduct&nbsp;mandatory audits.&nbsp;This includes&nbsp;employees&nbsp;who&nbsp;receive benefits such as retirement funds, health insurance, 401(k) plans, or other employment benefits.&nbsp;Under&nbsp;the Employee&nbsp;Retirement Income Security Act&nbsp;(ERISA),&nbsp;these benefits are subject to audits.&nbsp;<\/p>\n\n\n\n<p>To ensure a smooth audit process,&nbsp;the AICPA&nbsp;has&nbsp;provided&nbsp;the&nbsp;Employee&nbsp;Benefit Plan Audit Guide and how to prepare&nbsp;for it.&nbsp;&nbsp;<\/p>\n\n\n\n<p>This blog&nbsp;breaks down&nbsp;AICPA\u2019s&nbsp;guide&nbsp;for businesses undergoing an EBPA, helping&nbsp;them&nbsp;navigate the process efficiently and avoiding&nbsp;common pitfalls.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_50 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-69d909559579e\" aria-hidden=\"true\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d909559579e\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#What_is_an_Employee_Benefit_Plan_Audit\" title=\"What is an Employee Benefit Plan Audit?&nbsp;\">What is an Employee Benefit Plan Audit?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Three_Stages_of_an_Employee_Benefit_Plan_Audit\" title=\"Three Stages of an Employee Benefit Plan Audit&nbsp;\">Three Stages of an Employee Benefit Plan Audit&nbsp;<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Pre-Audit\" title=\"Pre-Audit&nbsp;&nbsp;\">Pre-Audit&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#During_the_Audit\" title=\"During the Audit&nbsp;\">During the Audit&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Post-Audit\" title=\"Post-Audit&nbsp;\">Post-Audit&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#How_does_the_employee_benefit_plan_get_audited\" title=\"How&nbsp;does&nbsp;the employee&nbsp;benefit&nbsp;plan get audited?&nbsp;\">How&nbsp;does&nbsp;the employee&nbsp;benefit&nbsp;plan get audited?&nbsp;<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Planning_and_Risk_Assessment\" title=\"Planning and Risk Assessment&nbsp;\">Planning and Risk Assessment&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Testing_Financial_Transactions_and_Internal_Controls\" title=\"Testing Financial Transactions and Internal Controls&nbsp;&nbsp;\">Testing Financial Transactions and Internal Controls&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#IRS_Compliance_Verification\" title=\"IRS Compliance Verification&nbsp;\">IRS Compliance Verification&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Issuing_the_Audit_Report\" title=\"Issuing the Audit Report&nbsp;&nbsp;\">Issuing the Audit Report&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Correcting_and_Maintaining_Compliance\" title=\"Correcting and Maintaining Compliance&nbsp;&nbsp;\">Correcting and Maintaining Compliance&nbsp;&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.acobloom.com\/us\/blog\/employee-benefit-plan-audit\/#Conclusion\" title=\"Conclusion&nbsp;\">Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_an_Employee_Benefit_Plan_Audit\"><\/span>What is an Employee Benefit Plan Audit?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>EBPAs are independent reviews mandated by the DOL to verify compliance and accurately depict the financial picture of employee benefit plans. The principal purposes of the EBPA are to confirm the financial soundness of an employee benefit plan. To&nbsp;determine&nbsp;if financial statements fairly present the EBPs financial position&nbsp;in accordance with&nbsp;GAAP. And to verify compliance with ERISA and all other applicable laws.&nbsp;&nbsp;<\/p>\n\n\n\n<p>This requirement applies to most private sector plans with 100 or more participants at the start of the&nbsp;planned&nbsp;year. While retirement plans like 401(k) plans or defined pension plans are often associated with audits, health and welfare benefit plans are also audited.&nbsp;&nbsp;<\/p>\n\n\n\n<p>An independent qualified auditor, who is an independent CPA, performs the audit&nbsp;in accordance with&nbsp;GAAS.&nbsp;<\/p>\n\n\n\n<style>\n    .cta-section {\n        background: #293c8d;\n        color: white;\n        padding: 30px 30px;\n        text-align: center;\n        border-radius: 15px;\n        box-shadow: 0 8px 15px rgba(0, 0, 0, 0.2);\n        margin: 50px auto;\n        max-width: 1100px;\n    }\n    .cta-section h2 {\n        font-size: 32px;\n        font-weight: bold;\n        margin-bottom: 20px;\n        line-height: 1.2;\n        color: white;\n    }\n    .cta-section p {\n        font-size: 16px;\n        margin-bottom: 25px;\n        line-height: 1.5;\n        color: white;\n        text-align: center;\n    }\n    .cta-section .btn {\n        background-color: #F35E25;\n        color: white;\n        border: none;\n        padding: 15px 30px;\n        font-weight: bold;\n        border-radius: 50px;\n        transition: all 0.3s ease;\n        cursor: pointer;\n        text-decoration: none;\n        display: inline-block;\n    }\n    .cta-section .btn:hover {\n        background-color: #F35E25;\n        transform: scale(1.05);\n    }\n    .cta-section .highlight {\n        color: #F35E25;\n        font-weight: bold;\n    }\n\n    \/* Popup Styles *\/\n    .popup-overlay {\n        display: none;\n        position: fixed;\n        top: 0;\n        left: 0;\n        width: 100%;\n        height: 100%;\n        background: rgba(0, 0, 0, 0.5);\n        justify-content: center;\n        align-items: center;\n    }\n    .popup-content {\n        background: #fff;\n        padding: 20px;\n        border-radius: 10px;\n        max-width: 400px;\n        width: 90%;\n        position: relative;\n        text-align: center;\n    }\n    #close-popup {\n        position: absolute;\n        top: 10px;\n        right: 15px;\n        font-size: 20px;\n        cursor: pointer;\n        color: #333;\n    }\n\np.headpop {\n    color: #E36F25;\n    font-size: 28px;\n    font-weight: bold;\n    text-align: center;\n font-family: 'Roboto', sans-serif; \/* Added Roboto font *\/\n}\n\np.primaryhead{\n color: #E36F25;\n    font-size: 32px;\n    font-weight: 600;\n    text-align: center;\n    color: white;\n     font-family: 'Roboto', sans-serif; \/* Added Roboto font *\/\n}\n\n\n.patterned-cta {\n    position: sticky;\n    overflow: hidden;\n}\n\n\/* Keep content above patterns *\/\n.patterned-cta * {\n    position: relative;\n    z-index: 1;\n}\n\n\/* Pattern Circles *\/\n.patterned-cta .pattern-circle {\n    position: absolute;\n    width: 300px;\n    height: 300px;\n    background: rgba(255, 255, 255, 0.08);\n    border-radius: 50%;\n    top: -120px;\n    left: -120px;\n    z-index: 0;\n}\n\n.patterned-cta .pattern-circle.bottom {\n    top: auto;\n    left: auto;\n    bottom: -120px;\n    right: -120px;\n}\n\n\/* Pattern Square *\/\n.patterned-cta .pattern-square {\n    position: absolute;\n    width: 180px;\n    height: 180px;\n    background: rgba(255, 255, 255, 0.05);\n    top: 30px;\n    right: 60px;\n    border-radius: 20px;\n    z-index: 0;\n}\n\n\n<\/style>\n\n<div class=\"container\">\n     <div class=\"cta-section patterned-cta\">\n\n\n       <!-- Background Patterns -->\n        <span class=\"pattern-circle\"><\/span>\n        <span class=\"pattern-circle bottom\"><\/span>\n        <span class=\"pattern-square\"><\/span>\n\n<p class=\"primaryhead\"><font color=\"white\">Download the EBP Audit Guide<\/font><\/p>\n<p>Whether you&#8217;re a plan sponsor or fiduciary seeking clarity,<br> this comprehensive guide walks you through every audit requirement.<\/p>\n       \n        <a href=\"#\" class=\"btn\" id=\"download-btn\">Download Now<\/a>\n    <\/div>\n<\/div>\n\n<!-- Popup Form -->\n<div id=\"popup-form\" class=\"popup-overlay\">\n    <div class=\"popup-content\">\n        <span id=\"close-popup\">&times;<\/span>\n <p class = \"headpop\">Get Your Free Copy<\/p>  <!-- New Heading Added --><br>\n       \n<div class=\"wpcf7 no-js\" id=\"wpcf7-f3930-o1\" lang=\"en-AU\" dir=\"ltr\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/us\/wp-json\/wp\/v2\/posts\/6021#wpcf7-f3930-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<div style=\"display: none;\">\n<input type=\"hidden\" name=\"_wpcf7\" value=\"3930\" \/>\n<input type=\"hidden\" name=\"_wpcf7_version\" value=\"5.8.5\" \/>\n<input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_AU\" \/>\n<input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f3930-o1\" \/>\n<input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/>\n<input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/>\n<\/div>\n<div class=\"row\">\n\t<div class=\"col-lg-12 col-md-12\">\n\t\t<div class=\"form-group\">\n\t\t\t<p><label>Your Name <sup>*<\/sup><\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"your-name\"><input size=\"40\" class=\"wpcf7-form-control wpcf7-text form-control\" aria-invalid=\"false\" value=\"\" type=\"text\" name=\"your-name\" \/><\/span>\n\t\t\t<\/p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<div class=\"row\">\n\t<div class=\"col-lg-6 col-md-6\">\n\t\t<div class=\"form-group\">\n\t\t\t<p><label>Email <sup>*<\/sup><\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"email\"><input size=\"40\" class=\"wpcf7-form-control wpcf7-email wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-email form-control\" aria-required=\"true\" aria-invalid=\"false\" value=\"\" type=\"email\" name=\"email\" \/><\/span>\n\t\t\t<\/p>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"col-lg-6 col-md-6\">\n\t\t<div class=\"form-group\">\n\t\t\t<p><label>Phone<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"tel\"><input size=\"40\" class=\"wpcf7-form-control wpcf7-tel wpcf7-text wpcf7-validates-as-tel form-control\" aria-invalid=\"false\" value=\"\" type=\"tel\" name=\"tel\" \/><\/span>\n\t\t\t<\/p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<div class=\"row\">\n\t<div class=\"col-12\">\n\t\t<div class=\"form-group mb-0\">\n\t\t\t<p><button type=\"submit\" class=\"btn default-btn\">Submit <span><i class=\"fa fa-arrow-right\"><\/i><\/span><\/button>\n\t\t\t<\/p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<p><div class=\"cf7-cf-turnstile\" style=\"margin-top: 0px; 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The AICPA Employee Benefit Plan Audit Guide emphasizes proper internal controls, keeping records and documentation&nbsp;accurate, and mitigating risk in a proactive manner. A three-phase process is outlined below that describes the way businesses should prepare for an Employee Benefit Plan audit.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pre-Audit\"><\/span>Pre-Audit&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Preparation and Organization:&nbsp;<\/strong><\/p>\n\n\n\n<p>An effective audit begins well before the auditor shows up on site (months ahead of time). It is&nbsp;very important&nbsp;to accumulate and gather all the required documentation that will be needed for the audit during this&nbsp;time frame. The auditor will use these documents&nbsp;in order to&nbsp;build a case as to&nbsp;whether or not&nbsp;the benefit plan was administered according to the regulations. Some of the documents to compile during this period are the plan document and all amendments to it, the Summary Plan Description (SPD), Form 5500 from the prior calendar year, and the financial statements that were audited for the prior calendar year.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Additionally, the organization must collect and provide participant census data, participant eligibility and payroll reports that substantiate the organization&#8217;s contribution remittances made on behalf of participants.&nbsp;<\/p>\n\n\n\n<p>Moreover, each service provider must easily provide the auditor with investment statements, trust agreements, and service provider contracts showing the organization&#8217;s active oversight of the benefit plan. The results of non-discrimination testing and (internal) controls over participant data and forfeitures need to be reviewed. Many organizations complete a thorough, comprehensive pre-audit with an EBP expert&nbsp;in an effort to&nbsp;identify&nbsp;and resolve potential problems before the actual audit begins to streamline the overall audit process.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"During_the_Audit\"><\/span>During the Audit&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Fieldwork:&nbsp;<\/strong><\/p>\n\n\n\n<p>Beginning once the audit has been&nbsp;initiated, the focus will lead to the focus of auditor&#8217;s work to&nbsp;provide assistance&nbsp;and provide information that is&nbsp;accurate&nbsp;and clear to them regardless of whether the auditor works on-site or remotely.&nbsp;<\/p>\n\n\n\n<p>Typically, the auditors will&nbsp;require&nbsp;the conduct of &#8220;walk-throughs,&#8221; either in-person or virtually, of the key business activities, such as how the contributions are made, and how&nbsp;participants enroll in the plan.&nbsp;<\/p>\n\n\n\n<p>The auditors will obtain sample testing of the transaction, including distribution(s), loan(s), and forfeitures, compared to what the terms of the plan say&nbsp;regarding&nbsp;how they should be executed to verify that the plan is&nbsp;operating&nbsp;according to the written terms.&nbsp;<\/p>\n\n\n\n<p>Auditors will conduct interviews only with the third-party service provider and\/or with the plan fiduciaries, confirming the investments and bank account balances through custodians and obtaining direct confirmations from each custodian once the assets are under the custodian\u2019s control. In addition, auditors will also interview third-party providers and\/or plan fiduciaries to ensure that the internal controls are in place as required by the plan fiduciary\u2019s policies and procedures.&nbsp;<\/p>\n\n\n\n<p>Delay in providing answers to an auditor during any phase of the audit will increase administrative time delays and negatively&nbsp;impact&nbsp;how the auditor views the governance structure of the plan.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Post-Audit\"><\/span>Post-Audit&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Finalization and Follow-Up:<\/strong>&nbsp;<\/p>\n\n\n\n<p>A thorough review of the final draft of the audit report included the financial statements as well as&nbsp;possible items&nbsp;noted or recommended by the auditor will need to be performed by plan sponsors in&nbsp;a timely&nbsp;fashion. Auditors&nbsp;are required to&nbsp;provide a completed Form 5500 with the final audit report to the Department of Labor (DOL) no later than nine and one-half months after the end of the plan year.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.acobloom.com\/us\/contact-us\/?utm_medium=orgnc&amp;utm_source=blog&amp;utm_campaign=us&amp;utm_content=consulting&amp;utm_term=in-content-cta-blog-banner\" target=\"_blank\" rel=\" noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"367\" src=\"https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-1024x367.jpg\" alt=\"Outsourcing Revenue Cycle Management\" class=\"wp-image-2783\" srcset=\"https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-1024x367.jpg 1024w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-300x108.jpg 300w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-768x276.jpg 768w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-1536x551.jpg 1536w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA.jpg 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_the_employee_benefit_plan_get_audited\"><\/span>How&nbsp;does&nbsp;the employee&nbsp;benefit&nbsp;plan get audited?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Planning_and_Risk_Assessment\"><\/span><strong>Planning and Risk Assessment&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Prior to performing any data testing, The CPA must plan and evaluate the risk. To do this, the CPA reviews the governing documents of the plan, historical filings, and the internal controls of the plan to assess the risk of noncompliance or error in financial statement calculations. From that assessment, the CPA&nbsp;determines&nbsp;which sections of the plan to examine in more detail (e.g., timing of contributions, eligibility of participants, or tax-deferred contributions).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Testing_Financial_Transactions_and_Internal_Controls\"><\/span>Testing Financial Transactions and Internal Controls&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once the risk areas are&nbsp;identified, the auditor performs transaction testing to verify the accuracy of your plan&#8217;s financial statements. Additionally, they assess the effectiveness of your internal controls to ensure contributions are made promptly. This helps ensure participant data is accurately recorded, and all financial transactions are documented correctly. This level of testing will help provide assurance that your plan is&nbsp;operating&nbsp;in accordance with&nbsp;IRS tax rules.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"IRS_Compliance_Verification\"><\/span>IRS Compliance Verification&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When conducting your audit there will be many areas to consider;&nbsp;however&nbsp;one of the&nbsp;main areas&nbsp;is evaluating if your plan adheres to the basic criteria for qualification as outlined by the IRS, such as contribution limits, non-discrimination testing, and eligibility of participants. Your auditor will also confirm that all contributions and deferrals are&nbsp;submitted&nbsp;within the required timelines, and that every transaction (related to your plan) is within compliance&nbsp;of&nbsp;the IRS Code.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issuing_the_Audit_Report\"><\/span>Issuing the Audit Report&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once the audit is complete, a CPA will prepare an audit report that summarizes the financial condition of the plan as well as areas of concern about it. The audit report provides assurance to both the employer and the IRS that the plan is being&nbsp;operated&nbsp;properly and that the financial statements are&nbsp;accurate. The audit report will also list all identified errors or noncompliance&nbsp;identified&nbsp;by the auditor along with their remedies.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Correcting_and_Maintaining_Compliance\"><\/span>Correcting and Maintaining Compliance&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If any problems are discovered by the audit, the owner of the business ought to remedy those issues as soon as&nbsp;feasible. There is an opportunity to restore certain errors under the IRS Employee Plans Compliance Resolution System (EPCRS) that&nbsp;assists&nbsp;employers in keeping the qualified status of their plan while preventing disqualification or penalties from happening. In addition to showing good faith, resolving any issues quickly allows the employer to show an allegiance to&nbsp;comply with&nbsp;the law.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An Employee Benefit Plan Audit can be overwhelming for most businesses. However, with proper advance preparation, knowledge of the auditor&#8217;s&nbsp;methodology, and access to the AICPA Guide&#8217;s resources. These shift from merely a regulatory requirement to an opportunity. This opportunity can add significant value to your organization.&nbsp;<\/p>\n\n\n\n<p>A successful audit will not only fulfill all DOL and IRS requirements but also strengthen your plan&#8217;s financial integrity. By enhancing your internal control,&nbsp;identifying&nbsp;areas for operational improvement, and helping build trust in the plan among the areas. Staying up to date with changes, such as the SECURE 2.0 legislation, and new risks. This increases focus on audit quality found in recent editions of the guide will ensure your continued compliance.&nbsp;&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Businesses&nbsp;with&nbsp;over&nbsp;100&nbsp;employees&nbsp;that have&nbsp;account balances at the beginning of the&nbsp;financial&nbsp;year&nbsp;are required to&nbsp;conduct&nbsp;mandatory audits.&nbsp;This includes&nbsp;employees&nbsp;who&nbsp;receive benefits such as retirement funds, health insurance, 401(k) plans, or other employment benefits.&nbsp;Under&nbsp;the Employee&nbsp;Retirement Income Security Act&nbsp;(ERISA),&nbsp;these benefits are subject to audits.&nbsp; To ensure a smooth audit process,&nbsp;the AICPA&nbsp;has&nbsp;provided&nbsp;the&nbsp;Employee&nbsp;Benefit Plan Audit Guide and how to prepare&nbsp;for it.&nbsp;&nbsp; This blog&nbsp;breaks down&nbsp;AICPA\u2019s&nbsp;guide&nbsp;for businesses undergoing an [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6023,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[148,144,149,127,145],"class_list":["post-6021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-audit","tag-401k-plan-audit","tag-aicpa-audit-guide","tag-employee-benefit-plan-accounting","tag-employee-benefit-plan-audit","tag-employee-benefit-plan-audit-requirements"],"_links":{"self":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/comments?post=6021"}],"version-history":[{"count":5,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6021\/revisions"}],"predecessor-version":[{"id":6028,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6021\/revisions\/6028"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/media\/6023"}],"wp:attachment":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/media?parent=6021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/categories?post=6021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/tags?post=6021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}