Tech Talk: What Happens After an Audit Is Conducted?

Q. What happens after an audit of a retirement plan is conducted?

A. At the conclusion of the audit, the auditor will issue a report and state an opinion on the plan’s financial statements as well as any schedules required to be included as a part of the plan’s annual report filing. Auditors will also report on significant problems, if any were found. The auditor may also suggest ways to improve internal controls and plan operations.

This is a good time to ask questions about the auditor’s work. Audits frequently are found to be deficient because of the failure of the auditor to conduct tests in areas unique to employee benefit plans.

Accordingly, one can make sure that the auditor considered the following areas:

• whether plan assets covered by the audit have been valued fairly;
• whether plan obligations are properly stated and described;
• whether contributions to the plan were timely received;
• whether benefit payments were made in accordance with plan terms;
• if applicable, whether participant accounts are stated fairly;
• whether issues were identified that may affect the plan’s tax status; and
• whether any transactions prohibited under ERISA were identified properly.