business AICPA Audit Reporting Standard for Employee Benefit Plan Audits Effective December 15, 2021 December 14, 2021 Employee benefit plan administrators...you’ll want to read up on recent changes made to audit rules, including new requirements for engagement acceptance, audit risk assessment and more. *Editor’s Note: This blog has been updated as of December 14, 2021 for accuracy and comprehensiveness. Attention employee benefit plan administrators…are you up to speed on the new standard for benefit plan audits? In July 2019, the American Institute for Certified Public Accountants (AICPA) Auditing Standards Board voted to issue a new standard on audits of employee benefit plan financial statements. Reporting and performance requirements for practitioners auditing employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) will change for periods ending on or after December 15, 2021 (required implementation delayed one year due to the COVID-19 pandemic). More on the standard The standard is called Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, and includes a new report format for ERISA Section 103(a)(3)(C) audits, which in the past were known as limited-scope audits. Plan sponsors have to adhere to new procedures for an ERISA Section 103(a)(C)(3) audit as well as new considerations relating to Form 5500. The standard describes…. New requirements for engagement acceptance; Audit risk assessment and response; and Communications with those charged with governance. For audits of solely ERISA plan financial statements, the standard replaces AU-C Section 700, Forming an Opinion and Reporting on Financial Statements, and paragraph .09 of AU-C Section 725, Supplementary Information in Relation to the Financial Statements as a Whole. The standard also will amend various other AU-C sections in the AICPA Professional Standards. When will the standard be effective? Originally, the audit standard was expected to take effect for audits of financial statements for periods ending on or after December 15, 2020. Due to the COVID-19 pandemic, this has been pushed one year to December 15, 2021, with early adoption allowed. What plan administrators can do now to prepare: Assess and document whether the entity issuing the certification is a qualified institution.Confirm that the certification will cover both accuracy and completeness of the investment information.Ensure the draft Form 5500 will be substantially complete and available for the auditors review to prevent a delay of the auditor’s report issuance. Questions on the standard and how you can best prepare? Contact any member of our Employee Benefit Plan Services Team.
