Our governing body, the AICPA’s Auditing Standards Board (ASB), issued proposed changes under a Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statement of Employee Benefit Plans Subject to ERISA, that may have a profound impact on the way practitioners perform and report on employee benefit plan audits. If approved the changes would be effective for audits ending after December 15, 2018.
The changes are intended to provide better insight to the public regarding the scope of the responsibilities of management and the auditor, including when management imposes a limitation on the scope of the audit. In addition, the ultimate goal of both the AICPA and the Department of Labor is to improve ERISA plan audit performance. The highlights are as follow:
1) For ERISA-permitted limited-scope audits done primarily for 401k plans, the SAS would require a new form of report which would be a significant change from the current version. The new reporting format includes a requirement to report findings from procedures performed on specific plan provisions relating to the financial statements (this also applies to defined benefit pension and other defined contribution plans). The findings would be included in either the auditor’s report or issued as a separate report entitled Report on Specific Plan Provisions Relating to the Financial Statements,
2) Amendments to existing standards would also include:
For more information about the proposed changes and how they may affect your specific plan, please call our Employee Benefit Plan Audit specialists at (518) 456-6663.