401(k) Audits

What is a 401(k) Audit and why is it needed?

Briggs & Veselka provides audits for plans subject to the Employee Retirement Income Security Act (ERISA) regulations under the U.S. Department of Labor (DOL) regulations, as well as SEC 11-K filings.

Once the number of 401(k) plan participants surpasses 100, the IRS requires:
-An annual Form 5500 to be submitted
-An audit of the plan to be performed and attached to the annual Form 5500

If these items are not performed, the IRS can assign fees on a per daily basis for lack of Form 5500 alone. 

401(k) Audit Services We Perform

Limited Scope Audit
-A limited scope audit can be performed if an asset certification is presented from a qualified institution, such as a Trust Company, Bank or Insurance Company, certifying the investments and activity for the plan year.  The limited scope audit still covers the entire plan year and its operations and is acceptable with the Annual Form 5500 filing; however, requires less audit procedures related to the investment year-end balances and investment income for the period under audit.

Full Scope Audit
-A full scope audit includes the same procedures as that of a limited scope audit but also includes procedures that test the year-end investment balances as well as the investment activity for the period under audit.  Full Scope audits are necessary in which there is no certification received from a qualified institution to certify the investment balances and activity for the period under audit.

How You Can Prepare

Gathering any of the below documents will better prepare you and ensure a successful audit process.

Helpful Documents for a 401(k) Audit

401(k) plan and legal compliance governance documents such as:

-Plan document
-Adoption agreement
-Summary plan description
-Amendments to these plans or the ‘restated’ document
-IRS determination letter
-Fidelity bonds – any bonds covering the plan for fraud from fiduciaries

-Trustee/Custodian Audit package – Annual
-Certified trust statements

What are the Risks for Plan Sponsors?

As a plan administrator, you are responsible for properly selecting and monitoring service providers, including but not limited to qualified auditors and record keepers of employee benefit plans.

Failing to act prudently, the Plan Administrator could face potential fiduciary violations and civil penalty assessments.  It is in the Plan Administrator’s utmost interest to ensure the accurate administration and regulatory audits of your plan.

  • We can provide you step-by-step guidance on administration and audit regulations so that you are prepared every step of the way.
  • To gain a better understanding of your responsibilities, view our Fiduciary Responsibilities checklist here.

In this video, Meresa Morgan discusses our Employee Benefit Plan practice

Latest 401(k) Insights

  • Compliance Alert 2019 August 5, 2019 COMPLIANCE ALERT Upcoming compliance deadlines: 9/16*   Extended deadline for S corporation tax ...

Fast Facts

  • Briggs & Veselka is in the top 1% of accounting firms who audit more than 100 employee benefit plans
  • Asset values of the plans we audit range from $100,000 to almost $1 billion
  • More than 20 professionals are devoted to employee plan benefit audits from April through October
  • EBP auditors keep their skills current in this highly technical practice area by attending continuing education programs, including the annual AICPA National Conference on Employee Benefit Plans and other relevant seminars
  • We work closely with trustees, custodians and third-party administrators and we have a thorough understanding of their processes and statements
  • Active members of BKR International Employee Benefit Plan Auditing Committee
  • Members of the American Institute of Certified Public Accountants (AICPA) Employee Benefit Plan Audit Quality Center, including voluntary agreement to the Center membership requirements, which include designating a partner responsible for our employee benefit plan practice area; establishing quality control programs; performing annual internal inspection procedures; and making our peer review report findings publicly available.

Meresa Morgan

ERISA Practice & Audit Shareholder, CPA
meresa.morgan@bvccpa.com
713-353-1921

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Larry Dodson Audit Shareholder, CPA larry.dodson@bvccpa.com 512-480-8182 ...
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Kevin Hengst Audit Principal, CPA khengst@bvccpa.com 713-366-8514 ...
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Hernie Antonio Audit Director, CPA hantonio@bvccpa.com 713-366-8530 ...
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Meresa Morgan ERISA Practice & Audit Shareholder, CPA
meresa.morgan@bvccpa.com
713-353-1921 ...
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