DOL Communicates with Plan Administrators about Employee Benefit Plan Audit Quality

December 9, 2015

The U.S. Department of Labor sent letters to Employee Benefit Plan administrators informing them of the importance of identifying and hiring a qualified and experienced CPA firm.  The DOL’s Office of the Chief Accountant sent the letter to all administrators of plans required to have an annual financial statement audit. 

The timing of the DOL communication is intended to coincide with the period when many audit contracts are renewed or are out for proposal. The DOL letter urges plan administrators to exercise care in selecting a CPA firm that possesses the requisite knowledge of plan audit requirements and expertise to perform the audit in accordance with professional auditing standards, and to consider the following factors in ascertaining the qualifications of a CPA firm to perform their plan's audit:

  • The number of employee benefit plans the CPA audits each year, including the types of plans
  • The extent of specific annual training the CPA received in auditing plans
  • The status of the CPA's license with the applicable state board of accountancy
  • Whether the CPA has been the subject of any prior DOL findings or referrals, or has been referred to the state board of accountancy or AICPA for investigation
  • The result of the CPA's most recent employee benefit plan peer review, and whether such review  includes negative findings

The CPA profession has a long-standing commitment to quality and in May 2014, the AICPA launched the Enhancing Audit Quality initiative to help CPAs maintain high audit quality.  Since then, many new programs and resources have been put in place to assist members performing employee benefit plan audits. Also, the AICPA’s Employee Benefit Plan Audit Quality Center provides up-to-date information, resources, tools and events to support CPAs performing these complex audits.

If plan administrator clients contact your firm to discuss the DOL letter, be prepared to discuss your firm’s qualifications and approach to quality in employee benefit plan audits.  

The DOL will communicate with plan auditors separately in the coming weeks. The AICPA will inform members when these communications are sent.