The chief accountant of the U.S. Department of Labor (DOL) recently sent out an email regarding employee benefit plan audits and the importance of picking a quality CPA firm. While the email did not request a change of audit firm it did emphasize picking a quality CPA firm which possesses the requisite knowledge and expertise to perform an employee benefit plan audit in accordance with professional auditing standards. Also, the DOL message referenced it’s recent study which found serious deficiencies with nearly 40% of plan audits. A deeper dive into the DOL’s study noted the following:
- There is a clear link between the number of employee benefit plan audits performed by a CPA firm and the quality of the audit work performed. Analysis of the data indicates a wide disparity between those firms who perform the fewest plan audits and those firms that perform the largest number of plan audits. Firms who performed the fewest number of employee benefit plan audits annually had a 76% deficiency rate. In contrast, the firms performing the most plan audits had a deficiency rate of only 12%. (Most major deficiencies occurred in audits performed by firms which have less than 24 employee benefit plan audits.)
- CPA firms that were members of the American Institute of Certified Public Accountants’ (AICPA) Employee Benefit Plan Audit Quality Center tended to produce audits that have fewer audit deficiencies. Overwhelmingly, most CPAs in the two smallest audit strata (under 5 employee benefit plan audits) are not Employee Benefit Plan Audit Quality Center members.
- Training specifically targeted at audits of employee benefit plans (EBPs) may contribute to better audit work. As the level of EBP-specific training increased, the percentage of deficient audits decreased.
A Quality Employee Benefit Plan Auditor
Matthews, Carter & Boyce is a quality CPA firm which specializes in audits of employee benefit plans. MCB performs more than 24 employee benefit plans each year. As a longstanding member of the AICPA’s Employee Benefit Plan Audit Quality Center and we regularly provide training to a core group of staff who focus on employee benefit plans. Additionally, we participate in the AICPA’s peer review program and can provide copies of our latest results, upon request.
We are available for any questions or concerns you may have in relation to your employee benefit plans. Please do not hesitate to contact us at any time.
Information based on 2014 Audit Report published by the Department of Labor Employee Benefits Security Administration. Click to read the full report.