It’s that time. Your employee benefit plan has finally hit 120 participants, or you’re getting ready to start the plan audit again with your previous auditors. Perhaps you’re new to the process all together or are just curious as to what level of service you should actually be getting from the accounting firm that you’ve engaged. Having been involved in over 150 benefit plan audits, I’ve determined the top four things you should consider when evaluating your firm of choice.
1. Benefit Plan Experience
Technically, any independent qualified public accountant (we’ll just call them auditors for the purpose of this article) should be able to perform an audit of your employee benefit plan. However, a firm’s specific experience with benefit plans can provide them with a breadth of knowledge that would be difficult to amass otherwise. An advanced knowledge of typical prohibited transactions or compliance issues under IRS or DOL rules and regulations can allow the auditors to pick up on potential problems sooner, rather than later. Such knowledge will likely also include the best methods to resolve any issues that are uncovered, or they’ll be able to recommend an ERISA attorney to assist if the situation warrants it.
2. Knowledge of Specific Plan Types
Moving on from general experience with benefit plans, it’s always a good idea to find out if your auditors are familiar with your specific plan design. A typical defined contribution plan is fairly straightforward, but if your plan is required to file an 11-k, is a multi-employer plan, a pension plan, or has an employee stock ownership component, having a more intimate knowledge of how these plans work allows the auditor to be much more efficient when making a request or wrapping up technical issues.
Identifying quality vendors, aside from hiring and retaining top talent, is arguably one of the most challenging aspects of running a business. Furthermore, even if your firm of choice checks all of the technical requirement boxes, it’s still a good idea to make sure that you’re going to get along with your service team. You’ll likely have contact with your auditors for at least a few weeks a year, and if you can’t stand to be around them—or your team can’t—the process just won’t be as efficient as it could be. Different businesses take on a variety of personalities, and public accounting firms are no different. If you’re a progressive business that enjoys utilizing the latest tools, you may find it challenging to work with a firm that’s maybe a little old school.
Last, but certainly not least, if it’s your responsibility to choose your plan’s auditor, does your choice have the credentials in place to support your decision?
A few good general questions to ask might be:
- Are you members of the AICPA?
- If so, are you members of the AICPA’s Employee Benefit Plan Audit Quality Center?
- Can I see your last peer review report?
- How many members of my service team are CPAs?
- Do you have a written quality control policy in place?
- Do you perform benefit plan specific training for the members of my service team?
This list is obviously not all inclusive, but these types of questions can help build a picture of the level of service you may be receiving.
All in all, meeting your requirement to have your employee benefit plan audited doesn’t necessarily have to be a painful task. By asking a few pointed questions and performing a little due diligence, you can select an auditor with the experience, insight, credentials, and personality that fits your business.
Learn more about our EBP expertise and contact one of our team members.