Audit season is in full swing for retirement plans, and if your company has a “large plan” (defined as more than 100 participants) you are required to undergo an annual audit by a CPA. This requirement kicks in when your start-of-year participant count exceeds 120 for the first time. If your company sponsors a plan and you’re new to this requirement, or you want to replace your current provider, how do you select an auditor?
While you may feel like any CPA will do, you want to be sure to utilize an auditor that specializes in ERISA plan audits. The ERISA rules are complex so you want an auditor who is knowledgeable about the intricacies of the rules. The CPA firm you hire must have experienced credentialed individuals who have a proven track record for auditing qualified plans.
To help guide you through the selection process we put together an interview guide you can use to interview auditor candidates.
About the firm and general
- Please provide an overview of your firm.
- Please describe your experience in auditing ERISA plans (what percentage of your audit work is qualified plans, what types of plans you audit, etc.) for the firm and for you specifically.
- Please describe the experience of the specific people who will be involved in your audit (including both the junior and senior level staff), including their general audit experience, their experience with qualified plans specifically, and their qualifications and designations.
- How would you describe your philosophy with regard to plan audits and what would you expect your client to gain from the audit process? What do you consider the objective of the audit process to be?
- How does your firm distinguish itself from the competition?
The audit process and experience
- Please describe your typical audit timeline and service standards for a qualified plan audit. When should we expect the work to begin, how long will the work take to complete, and when can we expect a final signed audit report for filing? If we require the report to be completed by September 15th for internal reasons, do you agree to meet that deadline?
- Please describe your testing procedures with regard to qualified plan audits and the types of errors that you have uncovered in other audits.
- Please describe the extent to which senior auditors are involved in the audit of our plan
- How much of the work is done on site at our office versus remotely?
- How do you communicate your findings to us? If we require that the auditor attend a Retirement Committee meeting and/or a Board meeting to communicate the findings and to review the management representation letter, is this in-person meeting included in your service?
- Please give some examples where you helped your clients develop procedures to improve their internal controls.
Fees and references
- Please provide a cost estimate for our plan audit, assuming a limited scope audit.
- Please provide three references for qualified plan audits, including company name, client contact name and contact information, length of engagement, scope of engagement.
When you follow a structured interview process upfront, you can find the right auditor to serve your firm and help you meet your annual audit requirements. If you need assistance with the process or want to ask an experienced retirement plan specialist questions about this requirement, please contact us.