Hiring an employee benefit plan auditor

Have the plan's qualified advisers establish whether an audit is required and the applicable reporting period and filing arrangement. Eligibility rules and exceptions need review for the actual plan. Once the requirement is clear, give candidates the plan type, participant and asset information, recent changes and the required completion date.

Identify the plan administrator and the person authorized to appoint the auditor. Include the recordkeeper, third-party administrator, payroll team and other service providers in the information map. An audit proposal should explain what the auditor needs from each, so the company can determine whether the timetable is feasible.

The Department of Labor advises plan administrators to select an independent qualified public accountant and consider relevant benefit-plan audit experience. Its guidance notes that these audits involve areas specific to plans. Ask candidates about experience with your plan type and any unusual investments or transactions, without seeking other clients' confidential records.

Verify the responsible professional's licensing and ask the firm to assess independence under the applicable rules. Identify who will perform and review the work. A large firm's general audit reputation does not establish which people will handle your plan or whether they understand its particular recordkeeping arrangements.

Ask for the expected schedules, supporting evidence and management representations. Determine which are prepared by the recordkeeper, administrator, company or another accountant. Confirm that those parties have agreed to supply them and identify fees outside the audit quote. A low audit price can assume extensive preparation work that nobody has accepted.

Discuss how the auditor will obtain information held by another service provider and how access restrictions are resolved. Agree a company contact for participant-data questions, contributions and plan documents. Keep sensitive participant information within approved channels and limit access to the people who need it.

Ask how the firm handles a missing schedule, conflicting source totals or a late provider response. The engagement should identify communication and fee consequences without promising that evidence problems will have no effect on the report or timing. Management needs early notice of a material obstacle.

Have the auditor explain the proposed reporting scope and any particular audit election or limitation relevant to the plan. Obtain advice on whether that arrangement is available and appropriate. Avoid assuming that an investment provider's certification eliminates every part of the auditor's work.

Specify which financial statements, schedules, communications and follow-up discussions are included. Ask how findings requiring correction will reach the plan administrator and other responsible providers. Remediation, legal advice and amendments may require separate engagements; identify that boundary before a finding arrives.

Schedule a walkthrough of the report, significant findings and unresolved matters. Ask what the administrator must decide or correct and who will carry those actions forward. The Department of Labor's selection guidance encourages administrators to ask about the auditor's work, rather than treating receipt of a signed report as the end of oversight.

Retain the appointment evidence, final report and action record with the plan's files. Confirm who owns filing coordination and later questions. Judge the engagement by professional scope, communication and completed work, without asking the auditor to guarantee a particular opinion or to assume the administrator's responsibilities.