The American Institute of CPAs has published a Q&A series to help auditors of benefit plan financial statements deal with this complex area and a revised auditing standard.
AICPA Industry FAQs on Employee Benefit Plans with Sample Auditor Reports for the Initial Year of Implementation of SAS # 136, as amended, provides non-authoritative guidance on the auditor’s reports for the year of initial implementation of AICPA Statement on Auditing Standards (SAS) No.136 – Formulation of an Opinion and Report on financial statements of employee benefit plans submitted to ERISA, as amended.
The AICPA has been working to improve the quality of benefit plan audits since the Ministry of Labor issued a report in 2015 on the status of audits of the ERISA plan (see AICPA pushes for audit and assurance changes). The Department of Labor’s Benefits Security Administration found serious deficiencies in 39% of the benefit plan audits it reviewed. In response, the AICPA developed a six-point plan to improve audits and launched a certification program to better train CPAs in auditing benefit plans as part of its Audit Quality Improvement Initiative.
Since ERISA requires the submission of certain comparative financial statements, AICPA’s new FAQ resource that debuted Tuesday offers illustrations and options for auditors when reporting during the reporting year. implementation of the AICPA Employee Benefit Plans Auditing Standard.
“As part of the ongoing efforts of the AICPA Auditing Standards Board to improve the relevance and communicative value of auditor reports, SAS # 136 specifically addresses the important public interest associated with audits of pension plans. employee benefits submitted to ERISA, ”said Linda Delahanty, senior director of the AICPA Auditing and Attestation Standards Team, in a statement. “This document provides useful, non-authoritative advice to auditors who are currently implementing SAS # 136 for the 2020 plan years. Next year, all EBP auditors will implement SAS # 136 and we hope they find the sample auditor reports in this FAQ helpful.