The Benefit Plan Audit: How it Works

I perform limited scope employee benefit plan audits on defined contribution 401k plans for single employers. My streamlined process will make auditing your retirement plan easy while adhering to the highest standards.

Virtual Audit Services

Your company wants your employee benefit plan audit completed with as little disruption as possible so my approach is designed to be simple and painless. It starts with a virtual audit process. Virtual audit services mean no in-office interruptions so you can keep daily operations humming while the audit is in progress.

Using special audit software developed by the AICPA, I'm able to provide a completely virtual offsite audit experience. This tool offers a secure file sharing interface so all audit documents can be safely transmitted. I'll also work with the Third Party Administrator (TPA) and/or trustee to get the audit package, reports, and whatever test items are available on the plan's portal myself. All you need to do is put me in touch with you TPA and I'll do the rest.

Here's what happens after all of the testing is done:


A draft of the financials and notes are prepared.


We go over any findings together that will mitigate risk.


You approve the draft and the report is finalized.

The Benefit Plan Audit Process

Acceptance and Planning. The new ERISA Section 103(a)(3)(C) audit standards have made some changes to the acceptance process, and management has more responsibility in determining if the plan qualifies for this type of audit (previously referred to as a limited-scope audit). I will make sure you know what your responsibilities are and give you the necessary tools to complete your assessments. After I have accepted the engagement, I begin the planning process, which includes obtaining pertinent plan information from your TPA, such as the plan document, IRS opinion letter, and other audit package basics. I build out a profile of your plan, which creates the foundation for the notes to the financial statements. Using personally-developed questionnaires, I gather the necessary information about your company and 401(k) plan, including an overview of your internal controls and processes. This helps me create my overall audit strategy. If this is not a first-year audit, we will only need to discuss any changes from the prior year.

Risk Assessment. In order to appropriately plan my audit testing, I will perform a thorough risk assessment of your plan, processes, and internal controls. This is a great opportunity for me to provide guidance and recommendations for areas that may be lacking in controls, or that may not be working properly in your plan. This helps to prevent compliance issues in the future. Don’t be scared – most of this information is gathered in the planning stage and is confirmed during the testing stage.

Testing. I will tailor my audit tests specifically to your plan and participants. I will provide you with a detailed list of chosen participants and the support documents needed. For many clients, I am able to obtain the majority of the support documents directly from the TPA’s website, lessening the time burden on your staff. Items typically obtained directly from the client would include payroll journals and personnel records. All records can be securely uploaded directly to the portal in my audit software.

Completion and Deliverables. After testing, it’s time to wrap up any questions and draft the financial statements and notes. You will receive a draft for review and approval. At the conclusion of the audit, you will receive a final auditor’s report, which includes the financial statements and notes; this is what accompanies the Form 5500 filing. You’ll also receive a comprehensive letter detailing all my recommendations for your plan’s administration. This is for your eyes only, it doesn’t go to the DOL or IRS.

Between Audits. I'm always available during the year for an email or call to go over any questions you may have regarding your plan. Handling issues as they arise can help prevent the discovery of compliance issues during the audit.