The American Institute of Certified Public Accountants issued an exposure draft with proposed changes on the statement on auditing standards regarding forming an opinion and reporting on financial statements of employee benefit plans subject to the Employee Retirement Income Security Act of 1974. One aspect of the proposal includes a requirement to report findings from procedures performed on specific plan provisions.
The new reporting requirement, Report on Specific Plan Provisions Relating to the Financial Statements, relates to reporting findings relating to the results of tests in the following areas; participant eligibility, benefit payments, claim payments, participant vesting provisions, employer and employee contributions, disclosure of prohibited transactions, IRC compliance tests, participant asset allocations, use of forfeitures, recording of account activity, and allocation of expenses.
The purpose of the change is to improve the communicative value and relevance of the auditor’s report. The proposed effective date is for audits of financial statements for periods ending on or after December 15, 2018.
For more information on the exposure draft and additional changes included, please click here for a copy of the exposure draft.