NEWS

Upcoming Changes to Employee Benefit Plan Audits

June 4, 2021

In July 2019, the AICPA Auditing Standards Board (ASB) issued as a final standard, Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA (EBP SAS). The effective date is for audits of ERISA plan financial statements for periods ending on or after December 15, 2021.

The new SAS includes new requirements in all phases of an audit of ERISA plan financial statements, including but not limited to, engagement acceptance, risk assessment, performance procedures and communication with those charged with governance and reporting.

A key change from these new standards is related to limited scope audits which will now be referred to as ERISA section 103(a)(3)(C) audits. The SAS will continue to provide the plan administrator the ability to have an auditor conduct limited procedures on the investment information certified as complete and accurate by the custodian but it will provide changes to the auditor’s report which will provide greater transparency to the scope and nature of the audit, in addition to the actual procedures performed.