Now that the hard work is complete, the auditor will issue a report and state an opinion on your plan’s financial statements and any schedules that are required to be included in the annual filing. If everything is in good shape, your auditor will confirm that the financial statements are indeed accurate. If there were any particular problems, your auditor will likely suggest ways to improve your operations and controls. Make sure you ask questions and fully understand what needs to be improved.
Now that you have been through the process, there are things you can do to prepare for your next audit. Keep files for each plan each year so you can easily track activity, especially for loans and distributions which can be hard to recreate. Keep copies of all minutes, memos, amendments and other important information. Your auditor may have some suggestions for you that will make things run even more efficiently the following year.
A Summary of the Benefit Plan Audit:
When it is performed well, an audit provides critical protection for your employee benefit plan and the plan’s participants. An audit helps the company’s plan administrator carry out its obligation to file a complete and accurate Form 5500 with the Department of Labor.
Beyond that, an audit will improve:
Accountability: An independent audit of employee benefit plan financial statements go a long way in attesting to the soundness of your plan.
Financial Integrity: Your financial statements should provide reliable information that helps assess the plan’s current and future ability to pay benefits to your employees, including retirement, health and other promised benefits.
Improvements: By conducting an audit, a company is better positioned to take a close look at its plans and determine ways to improve or streamline operations. If there are weaknesses in your internal controls, the audit will help you identify ways to improve them.
While the annual audit of your employee benefits plan may feel like a burden to take on, knowing that your company is adhering to the intended benefit plan is valuable and reassuring. If you do have any problem areas, identifying and correcting them now will save you bigger problems in the future.
Skoda Minotti’s professionals have extensive experience performing financial statement audits for all types of retirement and employee benefit plans, both for publicly traded and privately owned businesses. We are members of the AICPA Audit Quality Center, and all of our benefit plan audit professionals receive benefit plan training on an annual basis.
Our benefit plan and financial experts are ready to advise and guide you as you think about your company’s benefit plan services. Discover how we can help your company become fiscally strong and economically stable.