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EBPAQC mission and requirements

5 months ago · 21 min read

Mission

The Center is a voluntary membership organization for firms that perform or are interested in performing ERISA employee benefit plan audits. Employee benefit plan audits include pension, health and welfare, and 401(k) plans subject to the Employee Retirement Income Security Act (ERISA) under the regulatory authority of the U.S. Department of Labor (DOL). The Center was established to promote the quality of employee benefit plan audits.

To achieve this goal, the Center has created a community of firms that demonstrate a commitment to employee benefit audit quality, and supports those firms by:

  • Providing members with timely communication of regulatory developments, best practices guidance, and technical updates.

  • Maintaining relationships with, and acting as a liaison to, the DOL on behalf of member firms.

  • Providing information about the Center’s activities to other employee benefit plan stakeholders.

The Center is governed by an Executive Committee that establishes general policies of the Center and oversees its activities. It also establishes the requirements for membership in the Center as necessary, subject to AICPA Board of Director’s approval.

The increasing complexity of employee benefit plan auditing and increased scrutiny by the DOL have resulted in a significant number of changes and issues for auditing firms and CPAs in general. Firms and CPAs will benefit from the assistance of the Center as a resource for improving employee benefit plan audit quality.

Membership Requirements

To be eligible to be a member of the Employee Benefit Plan Audit Quality Center, a firm must:

  • Designate an audit partner to have firm-wide responsibility for the quality of the firm's ERISA employee benefit plan audit practice. (Effective at admission date.)

  • Have all audit partners of the firm residing in the United States and eligible for AICPA membership be members of the AICPA. (Effective at admission date.)

  • Establish a program to ensure that all ERISA employee benefit plan audit engagement personnel possess current knowledge, appropriate to their level of involvement in the engagement, of applicable professional standards, rules and regulations for ERISA employee benefit plan audits. Such knowledge may be obtained from on-the-job training or training courses or both. For an individual signing audit opinions and an individual managing ERISA employee benefit plan audit engagements, the individual must complete a minimum of 8 hours of employee benefit plan-specific continuing professional education (CPE) within the three year period (or within the firm's or individual's most recent CPE period ending within the three year period) prior to signing an ERISA employee benefit plan audit opinion or managing an ERISA employee benefit plan audit engagement. Thereafter, the individual must have a minimum of 8 hours of employee benefit plan-specific CPE every three years (or within the firm's or individual's CPE period covering a three year period) where an individual continues in this capacity for ERISA employee benefit plan audits. (Program must be in place at admission; CPE requirement must be met in the firms or individual's first CPE cycle ending after admission date.)

  • Require the audit partner designated with firm-wide responsibility for the quality of the firm's ERISA employee benefit plan audit practice to participate in an annual Center-sponsored Designated Partner planning webinar on recent developments in employee benefit plan auditing each year. Participation may be on the live webinar, rebroadcasts, or archived webinar. (Effective upon admission. Designated Partners should view the annual Center webinar as soon as possible after the firm’s enrollment in the Center. However, if the firm joins after October 15, it is not necessary for the Designated Partner to view the previous annual Center webinar. The Designated partner would be required to meet this requirement for the first time in the subsequent year.)

  • Establish policies and procedures specific to the firms ERISA employee benefit plan audit practice to comply with the applicable professional standards and Center membership requirements. These policies and procedures must be documented and appropriately communicated. (Effective at admission date.)

  • In addition to meeting the quality control standards requirement for monitoring, establish annual internal inspection procedures that include a review of the firms ERISA employee benefit plan audit practice by individuals possessing current experience and knowledge of the accounting and auditing practices specific to ERISA employee benefit plan audits. The engagements inspected should be representative of the firms ERISA employee benefit plan practice considering the number and different types of plan audits (e.g.- defined benefit, defined contribution, health and welfare, multiemployer, ESOPs, limited and full scope) and the various locations at which those audits are performed. The internal inspection should include reviewing the firm's compliance with the Center membership requirements. The internal inspection reports specific to the ERISA engagements should be made available to the firm's peer reviewer. (Effective for firm monitoring performed beginning after admission date.)

  • Make publicly available information about its most recently accepted peer review as determined by the Executive Committee which can be sent via email ebpaqc@aicpa.org or fax to 919-419-4772. (Effective at admission date.)

  • Have its ERISA employee benefit plan audits selected as part of the firm's peer review reviewed by individuals employed by a Center member firm. (Effective for peer reviews commencing on or after admission date.)

  • Periodically file with the Center information about the firm and its ERISA employee benefit plan audit practice and agree to make such information available for public inspection, as determined by the Executive Committee.

  • Pay dues as established by the Executive Committee.

Comply with additional requirements as may be established by the Executive Committee and approved by the AICPA Board of Directors.

1 An audit partner refers to an individual who is legally a partner, owner or shareholder in a CPA firm or a sole practitioner and who performs audit services, concurring reviews (if applicable) or consultations on technical or industry-specific issues with respect to audit clients of the firm. Such individual should be party to any partnership, ownership or shareholder agreement of a CPA firm.

2 Member firms must use best efforts to ensure compliance with this membership requirement. Best efforts include (a) annually advising each audit partner that AICPA membership is mandatory; and (b) taking appropriate corrective action in the event that the firm detects non-compliance. In addition, while only audit partners residing in the United States and eligible for AICPA membership must be members of the AICPA, member firms must encourage all other firm professionals who are eligible for membership in the AICPA to enroll as an individual AICPA member.

3 Individuals managing the audit engagement are professional employees who have either continuing responsibility for the overall planning and supervision of the engagement or the authority to determine that an engagement is complete subject to final partner approval if required.

4 The Executive Committee has determined that Center member firms are required to make publicly available the following information, if applicable, relative to the firm’s peer review:

  • Peer review report

  • Letter of response, if applicable

  • Letter signed by the reviewed firm indicating that the peer review documents have been accepted with the understanding that the firm agrees to take certain actions, if applicable

  • Letter notifying the firm that certain required actions have been completed, if applicable, and

  • Letter notifying the firm that the peer review has been accepted

5 The Executive Committee has determined that Center member firms are required to file with the Center the following information:

  • Firm name and address

  • Indicate whether the firm is a member of PCPS

  • Name and contact information of the designated audit partner with firm-wide responsibility for the quality of the firms ERISA employee benefit plan audit practice

  • Name and contact information of the firms designated Center contact administrator (if different from designated person above)

  • Total number of CPAs in owner's group, CPAs in firm, professional staff, and firm personnel

  • Approximate number of ERISA employee benefit plan audits (i.e.- 1, 2-5, 6-25, 26-50, 51-100,101-500, over 500)

Membership Requirements Questions and Answers

Continuing Professional Education

Q1. If a staff level professional performs the entire ERISA audit, subject to a partner's review, is that individual considered an "individual managing ERISA employee benefit plan audit engagements" for purposes of the Center's CPE requirement?

A1. Yes. Individuals managing the audit engagement are professional employees who have either continuing responsibility for the overall planning and supervision of the engagement or the authority to determine that an engagement is complete subject to final partner approval, unless the partner in charge of the engagement assumes the role of manager on the engagement.

Q2. Are all partners of member firms required to have 8 hours of benefit plan-specific CPE every three years?

A2. No. Only those partners who sign ERISA employee benefit plan audit opinions are required to meet the Center's 8-hour benefit plan-specific CPE requirement.

Q3. Are partners who perform concurring partner reviews of ERISA employee benefit plan audits required to meet the Center's CPE requirement?

A3. No. Concurring partners are not required to have the 8 hours of benefit plan-specific CPE. However, concurring partners would be required to possess current knowledge, appropriate to their level of involvement in the engagement, of applicable professional standards, rules and regulations for ERISA employee benefit plan audits.

Q4. Where can a firm find qualifying employee benefit plan courses to meet the Center's CPE requirement?

A4. AICPA offers two national employee benefit plans conferences each year, as well as various employee benefit plan related webcasts and self-study CPE courses. The EBPAQC also offers CPE for participating in the Center's Live Forums. In addition, several state societies offer conferences and self-study courses for employee benefit plan auditors. If you live in a state where no such courses are offered, you may wish to encourage your state society to develop such programs.

Annual Internal Inspection Procedures

Q5. Will a firm's existing system of quality control satisfy this requirement?

A5. In most cases, no. This requirement is intended to lead firms to do something extra in their system of quality control by focusing on the specific policies and procedures applicable to a firm's accounting and auditing practice for ERISA audits. Firms that do not have inspection procedures specific to their ERISA audit practice as a part of their normal monitoring procedures are required to implement such procedures.

Q6. What inspection procedures would a firm need to perform related to its ERISA audit practice?

A6. The nature of inspection procedures will vary based on the firm's quality control policies and procedures and the effectiveness and results of other monitoring procedures. The adequacy of and compliance with a firm's system of quality control are evaluated by performing such inspection procedures as:

  • Review of selected administrative and personnel records pertaining to the elements of quality control.

  • Review of ERISA audit engagement working papers, reports, and clients' financial statements.

  • Discussions with the firm's personnel.

  • Summarization of the findings from the ERISA audit inspection procedures, at least annually, and consideration of the systemic causes of findings that indicate improvements are needed.

  • Determination of any corrective actions to be taken or improvements to be made with respect to the specific ERISA audit engagements reviewed or the firm's quality control policies and procedures.

  • Communication of the identified findings to appropriate firm personnel, including the designated partner in charge of the firm's ERISA audit practice.

  • Consideration of inspection findings by appropriate firm personnel who should also determine that any actions necessary, including necessary modifications to the system of quality control, are taken on a timely basis.

Q8. How would a small firm with one audit partner or a sole practitioner satisfies the inspection requirement?

A8. In small firms qualified individuals (partners or managers) may inspect their own work (on a post issuance basis only), if the requirements of the AICPA's Quality Control Standards in QC Section 10, Paragraph 109 are met. That section states:

"To effectively monitor one's own compliance with the firm's policies and procedures, it is necessary that an individual be able to critically review his or her own performance, assess his or her own strengths and weaknesses, and maintain an attitude of continual improvement. Changes in conditions and in the environment within the firm (such as obtaining clients in an industry not previously serviced or significantly changing the size of the firm) may indicate the need to have quality control policies and procedures monitored by another qualified individual."

Alternatively, some firms may choose to engage an outside-qualified inspector either annually or on a periodic basis.

Q9. How should the firm select the ERISA audits to be inspected?

A9. The selection of engagements for inspection should be focused on the firm's ERISA practice only (that is, not influenced by the size of the ERISA practice in relation to the firm's entire audit practice.) The number of engagements selected for inspection should be sufficient to provide the inspector with a reasonable basis for concluding whether the firm's system of quality control for its ERISA auditing practice is properly designed, and whether it was being complied with during the year. Engagements selected for review should provide a reasonable cross section of the firm's ERISA auditing practice with emphasis on engagements that are considered to have higher risk. Examples of the factors to consider when selecting engagements to inspect are:

  • Type of plan (e.g. defined benefit, defined contribution, health and welfare, multiemployer, ESOP)

  • Level of service (full scope or limited scope)

  • Experience of personnel assigned

  • Office where the engagement was performed

  • Initial year the ERISA audits are performed by the firm

The number of practice offices selected for inspection should be sufficient to provide the inspector with a reasonable basis for concluding whether the firm's quality control policies and procedures for its ERISA auditing practice are adequately complied with throughout the firm. Greater emphasis should be placed on selecting those offices with higher risk. Factors to consider when selecting offices include:

  • The number, size, and geographic distribution of offices

  • The degree of centralization of control and supervision of the firm's ERISA auditing practice

  • Recently merged or recently opened offices

Q10. Does the firm need to prepare a separate inspection report for the ERISA audits inspected?

A10. No. The firm may prepare a separate report on its inspection of ERISA engagements, or it may document the ERISA practice inspection scope and results in the firm's general monitoring/inspection documentation.

Q11. How long does a firm need to retain its reports on its inspection of ERISA engagements?

A11. The report and/or documentation should be retained for a period of time sufficient to enable those performing monitoring procedures and a peer review to evaluate the extent of the firm's compliance with its quality control policies and procedures.
Q12. Does the inspection need to be performed in the firm's peer review year?
A12. No. A peer review does not substitute for monitoring procedures. All firms are required by the Statements on Quality Control Standards (SQCS) to have in place a system to continually monitor their system of quality control and to measure their compliance with that system. One aspect of this monitoring is engagement inspections; however, since the objective of a peer review is similar to that of inspection procedures, a firm's quality control policies may provide that a peer review conducted under standards established by the AICPA may substitute for some or all of its inspection procedures for the period covered by the peer review.

Q13. Can a firm hire its peer reviewer to perform its annual ERISA audit practice internal inspection?

A13. Per PRP Section 2000 (Peer Review Standards Interpretation) Section 21-2, a firm that is hired to perform the peer review may perform that firm's annual internal inspection, except in the year immediately preceding or during the peer review year.

Q14. At what point during the firm's fiscal year should the self-inspection be performed?

A14. The self-inspection may be performed at any time during the year. However, the firm must designate an annual self-inspection period that is the same from year-to-year. For simplicity, the firm may wish to consider using its peer review year-end.

In determining its annual self-inspection period, a firm also should be mindful of the related benefits provided by those inspections. Ideally, the self-inspection would be performed prior to the benefit plan audit season each year, so that information learned from the self-inspection may be applied in the current year audits.

Self-inspections can provide important information about the composition of the firm's benefit plans practice, and should point out areas where the firm is deficient. Such information can help the firm more efficiently and effectively plan its ERISA audits, including determining timing of the engagements, staffing needs and availability, and necessary changes to audit plans and programs. It also may assist firms in determining staff training needs.

Q15. What plan year should be selected for the self-inspection?

A15. The self-inspection should be performed on the most recent plan year available.

Peer Review

Q16. What peer review information has the Executive Committee determined should be available to the public?

A16. Center member firms must make publicly available information about their peer review as stipulated in Note 4 to the membership requirements.

Q17. How does a firm make the peer review information available to the public?

A17. Upon admission into the Center, if your firm is a member of the PCPS or your state society participates in the Facilitated State Board Access Program, certain peer review information already is in the AICPA's public file, so you don't need to do anything.

If your firm's peer review report is not posted by the state society or by PCPS, then, you will need to forward the required information. You should e-mail the Center a copy of this information, which can be in the form of a Word or PDF file at or, if you prefer, fax it to us at 919-419-4772, within 30 days after joining the Center. Your files will be placed in the AICPA Peer Review Public File.

Q18. If a peer reviewer's firm is not a member of the Center, is the Center member firm now required to hire a new firm that is a Center member to perform its peer review?

A18. Not necessarily, but it is suggested that you encourage your peer reviewer's firm to join the Center. The Center's membership requirement states that the employee benefit plan audits selected as part of the firm's peer review be reviewed by individuals employed by a Center member firm. This requirement is intended to ensure that the member of the peer review team who reviews your ERISA engagements has specialized knowledge of the auditing and reporting requirements for ERISA engagements. It is this individual who must be employed by a Center member firm. Accordingly, if the firm you engage to perform your peer review is not a Center member, it may be possible for that firm to add a team member who is employed by a Center member firm for the sole purpose of reviewing your ERISA engagements, subject to the existing AICPA peer review team approval procedures.

Q19. If a firm's peer review is due in the year the firm joins the Center and the firm has already engaged a firm that is not a member of the Center to perform the firm's peer review, does it have to find another firm to perform the peer review?
A19. No. This requirement is effective for peer reviews commencing after the firm has joined the Center. However, you should discuss with your peer review firm your firm's need to comply with the Center membership requirement and the alternatives to satisfying the requirement.

Q20. Where can a firm find a listing of Center member firms in its state that perform peer reviews?

A20. You can search the AICPA peer reviewer database and include Employee Benefit Plan Audit Quality Center as one of the search criteria.

Firm Quality Control Policies and Procedures

Q21. How does a firm satisfy the Center requirement to establish policies and procedures specific to the firm's ERISA employee benefit plan audit practice to comply with the applicable professional standards and Center membership requirements? (Requirement effective on or before December 31, 2004)

A21. The Center requirement to establish policies and procedures specific to the firm's ERISA employee benefit plan audit practice to comply with the applicable professional standards is consistent with AICPA Statement on Quality Control Standards No. 7: A Firm's System of Quality Control (QC 10), which broadly defines a system of quality control (QC System) as a "process to provide the firm with reasonable assurance that the firm and its personnel comply with applicable professional standards and applicable regulatory and legal requirements, and that the firm or engagement partners issue reports that are appropriate in the circumstances. A system of quality control consists of policies designed to achieve these objectives and the procedures necessary to implement and monitor compliance with those policies." The Center requirement applies this same general quality control standard at the ERISA plan audit level. The firm's auditing policies and procedures should specifically address ERISA plan audits, including the five elements of the general quality control standard as they relate to the firm's ERISA audit practice.

Q22. What are the six elements of the general quality control standard and how are they related to a firm's ERISA plan audit practice?

A22. Per QC 10.14, the policies and procedures should encompass the following six elements at the ERISA plan audit level:

1. Leadership responsibilities for quality within the firm (the "tone at the top"): The firm should promote an internal culture based on the recognition that quality is essential in performing engagements and should establish policies and procedures to support that culture. Such policies and procedures should require the firm's leadership (managing partner or board of managing partners, chief executive officer, or equivalent) to assume ultimate responsibility for the firm's system of quality control. For Center member firms, the firm's ERISA audit practice designated partner should assume ultimate responsibility for the quality of the firm's ERISA audits.

2. Relevant ethical requirements: The firm should establish policies and procedures designed to provide it with reasonable assurance that the firm and its personnel comply with relevant ethical requirements. The AICPA Code of Professional Conduct establishes the fundamental principles of professional ethics, which include:

  • Responsibilities

  • The public interest

  • Integrity

  • Objectivity and independence

  • Due care

  • Scope and nature of services

3. Acceptance and Continuance of Clients and Engagements: The firm should establish policies and procedures for the acceptance and continuance of client relationships and specific engagements, designed to provide the firm with reasonable assurance that it will undertake or continue relationships and engagements only where the firm:

  • Has considered the integrity of the client, including the identity and business reputation of the client's principal owners, key management, related parties, and those charged with its governance, and the risks associated with providing professional services in the particular circumstances;

  • Is competent to perform the engagement and has the capabilities and resources to do so; and

  • Can comply with legal and ethical requirements.

The firm should obtain such information as it considers necessary in the circumstances before accepting an engagement with a new client, when deciding whether to continue an existing engagement, and when considering acceptance of a new engagement with an existing client.

4. Human Resources: The firm should establish policies and procedures designed to provide it with reasonable assurance that it has sufficient personnel with the capabilities, competence, and commitment to ethical principles necessary to:

  • Perform its engagements in accordance with professional standards and regulatory and legal requirements, and

  • Enable the firm to issue reports that are appropriate in the circumstances.

Such policies and procedures should address the following:

  • Recruitment and hiring, if applicable;

  • Determining capabilities and competencies;

  • Assigning personnel to engagements, if applicable;

  • Professional development; and

  • Performance evaluation, compensation, and advancement

5. Engagement Performance: The firm should establish policies and procedures designed to provide it with reasonable assurance that engagements are consistently performed in accordance with professional standards and regulatory and legal requirements, and that the firm or the engagement partner issues reports that are appropriate in the circumstances. Required policies and procedures should address:

  • Engagement performance,

  • Supervision responsibilities, and

  • Review responsibilities

6. Monitoring: The firm should establish policies and procedures designed to provide the firm and its engagement partners with reasonable assurance that the policies and procedures relating to the system of quality control are relevant, adequate, operating effectively, and complied with in practice. Such policies and procedures should:

  • Include an ongoing consideration and evaluation of the firm's system of quality control to determine:

    • The appropriateness of the design and

    • The effectiveness of the operation of the system of quality control.

  • Assign responsibility for the monitoring process to a partner or partners or other persons with sufficient and appropriate experience and authority in the firm to assume that responsibility.

  • Assign performance of monitoring of the firm's system of quality control to qualified individuals

  • The purpose of monitoring compliance with quality control policies and procedures is to provide an evaluation of:

  • Adherence to professional standards and regulatory and legal requirements;

  • Whether the quality control system has been appropriately designed and effectively implemented; and

  • Whether the firm's quality control policies and procedures have been operating effectively, so that reports that are issued by the firm are appropriate in the circumstances

Q23. Are there any additional matters that must be encompassed by the firm's policies and procedures specific to the ERISA employee benefit plan audit practice?

A23. Yes. The firm should establish policies and procedures to comply with Center membership requirements, including:

  • Designating an audit partner to have firm-wide responsibility for the quality of the firms ERISA employee benefit plan audit practice.

  • Having all audit partners of the firm residing in the United States and eligible for AICPA membership be members of the AICPA.

  • Establishing a program to ensure that all ERISA employee benefit plan audit engagement personnel possess current knowledge, appropriate to their level of involvement in the engagement, of applicable professional standards, rules and regulations for ERISA employee benefit plan audits; and minimum CPE requirements for an individual signing audit opinions and an individual managing ERISA employee benefit plan audit engagements.

  • Performing annual internal inspection procedures that include a review of the firms ERISA employee benefit plan audit practice by individuals possessing current experience and knowledge of the accounting and auditing practices specific to ERISA employee benefit plan audits.

  • Making publicly available information about its most recently accepted peer review as determined by the Executive Committee.

  • Having its ERISA employee benefit plan audits selected as part of the firm’s peer review reviewed by individuals employed by a Center member firm.

Q24. What quality control policies and procedures should ordinarily be addressed with regard to the competencies for the individual who is responsible for supervising an ERISA audit engagement and signing or authorizing an individual to sign the accountants report on such engagement (the practitioner-in-charge)?

A24. Consistent with the general quality control standards (QC Section 10, paragraph .45), the firm's quality control policies and procedures should ordinarily address the following competencies for the practitioner-in-charge of an employee benefit plan audit engagement.

  • Understanding of the role of a system of quality control and the Code of Professional Conduct—Practitioners-in-charge of an employee benefit plan audit engagement should possess an understanding of the role of a firm's system of quality control and the AICPA's Code of Professional Conduct, both of which play critical roles in assuring the integrity of the various kinds of accountant's reports.

  • Understanding of the service to be performed—Practitioners-in-charge of an ERISA employee benefit plan engagement should possess an understanding of the performance, supervision, and reporting aspects of the engagement, which is normally gained through actual participation in an employee benefit plan audit.

  • Technical proficiency—Practitioners-in-charge of an ERISA employee benefit plan audit engagement should possess an understanding of the applicable accounting and auditing professional standards including those standards directly related to the type of employee benefit plan and the kinds of transactions in which a plan engages.
    Familiarity with the industry—To the extent required by professional standards applicable to audits of ERISA employee benefit plans, practitioners-in-charge of an engagement should possess an understanding of the employee benefit plan industry. In performing an audit of financial statements, this understanding would include operating characteristics sufficient to identify areas of high or unusual risk associated with an engagement and to evaluate the reasonableness of industry specific estimates.

  • Professional judgment—Practitioners-in-charge of an ERISA employee benefit plan engagement should possess skills that indicate sound professional judgment. In performing an audit of financial statements, such skills would typically include the ability to exercise professional skepticism and identify areas requiring special consideration including, for example, the evaluation of the reasonableness of estimates and representations made by management and the determination of the kind of report necessary in the circumstances.

  • Understanding the organization's information technology systems— Practitioners-in-charge of an ERISA employee benefit plan audit engagement should have an understanding of how the organization is dependent on or enabled by information technologies; and the manner in which information systems are used to record and maintain financial information.

Q25. A firm has a comprehensive quality control policies and procedures document already in place. Is it necessary to amend the entire document to include specific wording covering the firm's ERISA practice, or is it acceptable to issue an addendum that addresses how the ERISA practice quality control will be achieved and how it interfaces with the firm's existing quality control document?

A25. Either method would be acceptable. A firm may amend each section of its existing quality control document to address its ERISA employee benefit plan audit practice or, alternatively, it may issue an addendum that addresses how the ERISA practice quality control will be achieved and how it interfaces with the firm's existing quality control document. Whichever method is used, the firm should ensure the documented policies and procedures specific to the firm's ERISA employee benefit plan audit practice are adequate to comply with the applicable professional standards and Center membership requirements, as discussed above.

Center Members Who Do Not Perform EBP Audits

Q26. Do the Center membership requirements apply to a member firm that does not perform ERISA employee benefit plan audits?

A26. Yes, certain Center membership requirements apply to a member firm that performs no ERISA employee benefit plan audits, whether the firm has an audit practice but performs no ERISA employee benefit plan audits or the firm has no audit practice.

A member firm with an audit practice but does not perform ERISA employee benefit plan audits is required to comply with the following membership requirements:

  • The firm must designate an audit partner to have firm-wide responsibility for the quality of the firm's ERISA employee benefit plan audit practice, and the firm’s designated audit partner (DP) must participate in the Center’s annual Center-sponsored Designated Partner planning webinar on recent developments in employee benefit plan auditing each year (either on the live event, rebroadcast or archived webinar).

  • Have all audit partners of the firm residing in the United States and eligible for AICPA membership be members of the AICPA.

  • Any individual who manages an ERISA audit engagement or signs an ERISA audit opinion must have 8 hours of employee benefit plan-specific CPE prior to managing an ERISA audit or signing an ERISA audit opinion. As such, it is recommended that firms that intend to propose on an ERISA audit ensure that such individuals have already obtained the 8 hours of employee benefit plan-specific CPE prior to submission of the proposal. Similarly, all engagement personnel assigned to an ERISA audit engagement should possess current knowledge, appropriate to their level of involvement in the engagement, of applicable professional standards, rules and regulations for ERISA employee benefit plan audits at the time of the initial ERISA engagement.

  • The firm must have established policies and procedures specific to the firm’s ERISA employee benefit plan audit practice to comply with the applicable professional standards and Center membership requirements. These policies and procedures must be documented and appropriately communicated.

  • The firm must ensure annually that it is in compliance with the applicable membership requirements, and that the firm’s quality control policies and procedures are documented and in place.

  • The firm’s latest peer review report must be posted to the AICPA public file.

  • When the member firm performs an ERISA employee benefit plan audit engagement it must comply with all of the Center membership requirements.

A member firm that does not have an audit practice must designate an audit partner to have firm-wide responsibility for the quality of the firm's ERISA employee benefit plan industry practice. This individual must comply with the same requirements as the Designated Partner (DP) responsible for a firm’s ERISA employee benefit plan audit practice. That is, the DP must be a member of the AICPA and must participate in the annual DP planning webinar. If at a later date the member firm establishes an audit practice, the firm must comply with all applicable Center requirements at the time the audit practice is established.

Designated Audit Quality Partner (DAQP) Qualifications

Q27. The EBPAQC membership requirement states that the DAQP must be a partner, owner or shareholder in a CPA firm and that such individual should be party to any partnership, ownership or shareholder agreement of a CPA firm. In the context of this requirement, can a firm’s non-equity CPA partner serve as the DAQP?

A27. Because each firm has so many different classes or levels of partners (such as non-equity partners) and the roles of those partners differ significantly from firm to firm, the EBPAQC will address this question on a case-by-case basis. Therefore, you should contact the EBPAQC at EBPAQC@aicpa.org regarding situations where your firm would like to designate a non-equity partner to serve as the firm’s DAQP. Ultimately, the EBPAQC Executive Committee shall determine whether the substance of the related EBPAQC membership requirement would be met with a non-equity DAQP candidate. Such determination by the Executive Committee would be based on the characteristics and responsibilities of the non-equity partner.

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