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DOL conducting audit quality assessment of 2020 plan year filings

Written on Sep 16, 2021

OSCPA staff report 

The U.S. Department of Labor has announced it is launching a study of employee benefit plan audits covered under the Employee Retirement Income Security Act of 1974 for plan years beginning in 2020. 

The study will assess the quality of audit work performed by independent qualified public accountants and will include calendar year 2020 filings filed on extension by Oct. 15, 2021. 

A commitment to excellence and protecting the public are defining qualities of what it means to be a CPA. Despite the hard work of the CPA profession, there have been challenges to maintaining audit quality, especially in specialized industries. The DOL  previously performed an audit quality assessment of the 2011 plan filing year and reviewed a sample of 400 audits. That study found nearly four of 10 audits contained major deficiencies. DOL referred audits with deficiencies to the applicable state board of accountancy and AICPA Ethics. 

For this new study, the DOL Employee Benefit Security Administration Office of the Chief Accountant is in the process of developing the sample methodology of plans and expects to make a sample selection and begin corresponding with plan administrators and independent qualified public accounting firms late this year. The DOL expects to take a year to conduct its analysis, so the resulting report is likely to be published in 2023. 

Quality is a core tenet of what CPAs stand for and we want to help you and your team maintain that strong commitment to excellent work. OSCPA and the AICPA are working together to identify both near and long-term solutions to ensure quality audit work in all cases. 

If selected for review, the IQPA firm will be asked to provide a full set of audit workpapers supporting the audit containing all documentation, including workpapers kept in other related files. Auditors must adequately document the auditing procedures applied, evidence obtained, and conclusions reached by the auditor in the engagement. AU-C Section 230, Audit Documentation, states that audit documentation provides evidence of the auditor's basis for a conclusion about the achievement of the overall objectives of the auditor, and evidence that the audit was planned and performed in accordance with generally accepted auditing standards and the applicable legal and regulatory requirements. 

The following resources highlight best practices and common deficiencies in ERISA EBP audits: