This non-authoritative EBPAQC tool is intended for use by CPAs auditing the financial statements of defined contribution 401(k) or 401(a) retirement plans to assist them in understanding the plan entity by summarizing the key provisions of the plan document that may be relevant to the plan audit.
A plan subject to ERISA is required to have a written plan document, which may be amended or restated from time to time for changes in provisions or to conform to new laws or regulatory requirements. The plan document is a legal document by which the plan administrator must abide. The provisions of plan documents normally deal with such matters as:
Eligibility to participate
Entitlement to benefits
Operation and administration of plan provisions
Identification of the plan’s named fiduciary and allocation of responsibilities among those who also serve in the capacity as fiduciaries for control and management of the plan
Delegation by fiduciaries of duties in connection with administration of the plan.
The plan auditor does not audit the plan document; however, key information specified in the plan document is used by the auditor in obtaining an understanding of the entity and performing substantive audit procedures related to:
Distribution of benefits
This tool is not intended to be a complete listing of all plan provisions that may affect the plan’s operations and qualification status. It also is not intended for use in the audit of other types of defined contribution plans, such as ESOPs or 403(b) plans, but may be tailored by the firm for use in those audits.