In the recent Audit Quality Report published by the Department of Labor (DOL), alarming findings shed light on the inadequate standards plaguing the audits of employee benefit plans (“EBP”). The study, conducted in November 2023, highlights critical audit deficiencies that jeopardize the integrity and reliability of financial reporting within these plans.
Widespread Non-Compliance
The audit quality study reveals a disturbing trend of non-compliance with auditing standards among auditors. Shockingly, a staggering 30% of audits fail to meet even the basic requirements, raising serious concerns about the accuracy of financial statements and the quality of CPA firms conducting EBP audits.
Deficiencies in Review Processes
The report underscores deficiencies in the review processes employed by audit firms, indicating a lack of rigorous oversight in ensuring compliance with regulatory standards. Such shortcomings undermine the credibility of audit outcomes and compromise the protection of plan participants’ assets.
Implications for Plan Participants
The implications of poor audit quality extend far beyond regulatory compliance. Inaccurate financial reporting can mislead stakeholders, endangering the financial security of plan participants and beneficiaries. It underscores the urgent need for heightened vigilance and accountability within the auditing profession.
Evaluate your Current Auditor
- Assess Your Plan’s Needs: Evaluate the unique needs and complexities of your employee benefit plan to determine the type of audit required.
- Verify your Auditor’s Credentials: Review your current auditor’s qualifications, ensuring they possess relevant experience with ERISA audits and appropriate certifications.
- Evaluate Your Auditor’s Experience and Reputation: Research your current auditor’s track record, reputation, and client feedback to assess their reliability and competence.
- Consider Your Auditor’s Approach: Understand your auditor’s approach to conducting your audit to ensure it aligns with your expectations and requirements.
- Prioritize Communication and Collaboration: Establish clear communication channels and expectations with your auditor to facilitate transparency, responsiveness, and collaboration through the audit process.
CPAClub: The EBP Auditors You Want. The Audit Quality You Need.
At CPAClub, we pride ourselves on being the top choice for EBP audits. Here’s why:
- Extensive Expertise: Talented, seasoned professionals with a unique mix of Big 4, regional, and local firm backgrounds with extensive EBP audit experience.
- Quality that Counts: Our team of fully licensed CPAs are proud members of the AICPA’s Employee Benefit Plan Audit Quality Center (EBPAQC). Quality is at the core of everything we do.
- Member Experience: We prioritize a 5-star experience and the value of our solutions. Say goodbye to hourly billing and welcome transparent pricing.
- People First: Much like your employee benefit plans, we put our people over profits. We live our best life with a 4-day year-round workweek, allowing for happier and healthier auditors to service your plans.
- Concierge Connection: We maintain continuous communication with a concierge approach through CPAClub Care and our Solutions scorecards, giving you visibility and peace of mind throughout the process.
Regardless of the size of your employee benefit plan, CPAClub is here to take your audit experience and quality to the next level. Contact us to get started.
