WillSanDiego CPA

If the plan has issues and you have selected an IQPA (CPA auditor) that has expertise in auditing employee benefit plans, the CPA auditor are going to find the problems first. And then possibly hold up the audit completion until the problems are fixed or disclose the issues in the footnotes to the financial statements that are filed as an attachment to the Form 5500. Just because you hire a very large accounting firm doesn't always mean they have expertise in auditing employee benefit plans.

Agree, file amended returns but use the VFDC (https://www.irs.gov/retirement-plans/irs-penalty-relief-for-dol-dfvc-filers-of-late-annual-reports ) where the penalty can be capped at $2,000 for the multiple being late with multiple years. Also the program allows the penalties to be abated.

First, hire a good ERISA attorney that can complete the VCP & the VFCP. Second file the Form 5500 without the Auditor's opinion but include a statement describing the holdup. Three, make a rough estimate of the receivable that is due to the plan and give a copy to the auditors. Four, ask the auditors to issue a disclaimer opinion because they are unable to audit the beginning balances. Five, consider firing and or suing the auditors (how many plans do they audit each year). Six, complete all the work deemed necessary by the ERISA attorney to correct the operational errors. Seven, good luck. On 403(b) plans the DOL has ruled that they would accept this wording for 403(b) plans. Auditor suggested wording In addition, the Plan has not maintained sufficient accounting records and supporting documents relating to annuity and custodial accounts issued to current and former employees prior to January 1, 2009. Accordingly, we were unable to apply auditing procedures sufficiently to determine the extent to which the financial statements may have been affected by these conditions. Because we were not able to apply auditing procedures to satisfy ourselves as to the appropriateness and completeness of the Plan’s net assets available for benefits as of December 31, 2009 and 2008, and the changes in net assets available for benefits for the year ended December 31, 2009, as described in the third paragraph above, and because of the significance of the information in the financial statements related to the Plan’s investments that we did not audit as described in the second paragraph above, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the accompanying financial statements and supplemental schedules taken as a whole.