Benefit Plan Services
Employee benefit plans are required to provide annual information to Participants, and various federal government agencies including the Internal Revenue Service and the Department of Labor. Reporting requirements for employee benefit plans are defined by the Employment Retirement Income Security Act (ERISA). Depending on the number of eligible participants in the plan at the beginning of the plan year, the entity may be defined as a small or large plan. Large plans are required to include financial statements audited by an independent certified public accountant with their annual reporting form. The financial statements accompanying the 5500 filing are required to be presented on the accrual basis of accounting in conformity with generally accepted accounting principles (GAAP).
If required, the annual audit can be full-scope or limited-scope depending on whether or not a proper certification is obtained from a qualifying institution acting as custodian of the plan funds.
The CPA’s role in auditing the financial statements of an employee benefit plan is much more than certifying numbers. A large portion of time is spent on compliance aspects of the plan. The plan document lays out the framework for how the plan is to work, the auditors role is to determine that the plan is working as the document states. In traditional non-issuer audits, the users of the financial statements are few, perhaps the company’s bank or minority owners. In employee benefit plan audits, the users of the financial statements are the hundreds or perhaps thousands who are participating in the plan. The plan auditor must perform procedures to determine that participants contributing to the plan are eligible and that the plan is not improperly excluding or including employees. In addition, plans must comply with certain operating tests, including tests of coverage, anti-discrimination and maximum benefit limitations.
At ThomasGaitens PC, we have extensive experience auditing defined contribution plans. We have performed both full scope and limited scope audits for large and small sponsors. In addition, we are also experienced in the preparation of the 5500 filing as well as ERISA reporting requirements concerning annual reporting to participants in regard to their vested and non-vested accrued benefits and Summary Annual Reports (SAR).