The purpose of an employee benefit plan audit is to test that the funds in the plan are not being misused or mismanaged. An audit will also determine if the plan is being operated in accordance with the plan document.
Generally, the U.S. Department of Labor (DOL) requires an employee benefit plan audit for companies that provide a 401(k), pension plan, or other defined benefit plan for more than 100 individuals (exceptions apply). An independent party such as a certified public accounting (CPA) firm, should conduct the audit to ensure proper compliance with DOL regulations, current Generally Accepted Auditing Standards (GAAS), and the Employee Retirement Income Security Act (ERISA).
There are penalties and fines for not complying. The DOL does check to ensure that qualified plans are audited annually. Failure to comply in a timely manner is typically expensive. The DOL has issued fines of up to $1,100 per day for late submission of employee benefit plan audit findings.
It is important that you work with a CPA that is thoroughly knowledgeable on conducting an employee benefit plan audit to verify that you are meeting your company’s fiduciary responsibilities. The DOL reviews audit reports to make sure plans are being properly administered for the beneficiaries of your employees. A recent survey of employee benefit plan audits by the DOL found that nearly 4 out of every 10 audits contained deficiencies, with thousands of businesses falling out of compliance.
McCarthy & Company's professionals are experienced in employee benefit plan audits. You can be assured that we will follow of the DOL, IRS and ERISA requirements.
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