employee benefit plan audit best practices · employee benefit plan audit best practices shannon...
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![Page 1: EMPLOYEE BENEFIT PLAN AUDIT BEST PRACTICES · EMPLOYEE BENEFIT PLAN AUDIT BEST PRACTICES Shannon Black, C.P.A., C.M.A., C.E.B.S. Black & Pinckard, L.L.C. Joe Lassiter, C.P.A. Pearce,](https://reader031.vdocuments.mx/reader031/viewer/2022041117/5f2d46fe106dfa58f83e3f82/html5/thumbnails/1.jpg)
EMPLOYEE BENEFITPLAN AUDIT
BEST PRACTICES
Shannon Black, C.P.A., C.M.A., C.E.B.S.Black & Pinckard, L.L.C.
Joe Lassiter, C.P.A.Pearce, Bevill, Leesburg, Moore, P.C.
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QUICK BACKGROUND ON ERISA AUDIT
REQUIREMENTS
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Compliance (and more)
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Why We Do What We Do?
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PLANNING
PLANNING
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PLANNING
• Engagement letter (sign it sowe can get started early
• Understand Plan operations and update documentation(change plan provisions, payroll system or service provider, audit scope)
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PLANNING
• Key Plan personnel (accounting, HR, payroll, plan administrator. Some do not understand fiduciary duties/responsibilities.)
• Who service providers are and what services they provide (anyone who provides servicesto the Plan)
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PLANNING
• Timing of audit fieldwork (the audit takes longer than what you see when we are in the field)
• Obtain census and audit package (what can go wrong here) and select samples.
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PLANNING
• SOC1 and investment certification• Discussions with Management• Analytical review (year to year
comparisons)• Financial statement preparation
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TESTING (FIELDWORK)
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TESTING (FIELDWORK)
• Recalculate gross compensation (why we do that)
• Agree census to payroll and demographics to underlying participant records (DOB, DOH, DOT for vesting and retirement age purposes)
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TESTING (FIELDWORK)
• Recalculate EE/ER contributions based on deferral % (obtained from enrollment/change forms or other sources if electronic process)
• Agree EE/ER contribution per census to participant account (CY/PY receivables in and out) –could be posted to wrong participant account
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TESTING (FIELDWORK)
• Confirmations (hard copy/email)
• Distribution request forms and evidence of termination (or confirmations) – check with TPA for check copies/forms/1099s if sponsor does not retain
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TESTING (FIELDWORK)
• Recalculation of investment income for sample of funds in participant accounts compared to return per Morningstar, Yahoofinance, etc.
• Ascertain that contributions are properly posted to investment selected by participant
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TESTING (FIELDWORK)
• Timely submission of contributions to trust (clarity on the rule!!!)
• Loans (if not certified)
• Rollovers (into Plan)
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WRAP-UP
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WRAP-UP
• Review process• Management
representation letter• Management comments
(suggestions for improvement or errors found)
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QUESTIONS
Shannon Black, C.P.A., C.M.A., C.E.B.S.Black & Pinckard, L.L.C.P.O. Box 26384Hoover, AL 35260(205) [email protected]
Joe Lassiter, C.P.A.Pearce, Bevill, Leesburg, Moore, P.C.110 Office Park Drive, Suite 100Birmingham, AL 35223(205) [email protected]
Contact Information: