Short plan year audit

[Guest Christie Banks]

I have a plan that has been audited for several years as a June year end. They have now switched to a Dec. year end. I understand that they can defer the reporting on the short year (July to Dec) until they file the 5500 for the next calendar year. The information in the short year still needs to be audited, though, doesn't it? My understanding that it was just a deferral of when to report on the audited period, not an exception to the audit requirement. I keep going back and forth with the administrator on this issue.

[actuarysmith]

You are correct on all counts - the audit is still required, just deferred.

[Kirk Maldonado]

If there is a short plan year (of 7 or fewer months) the regulations provide that the audit does not need to be performed for the short plan year, as long as the audit for both plan years accompanies the Form 5500 for the second plan year. Section 2520.104-50(B).

[Guest Christie Banks]

I guess that's where the confusion comes in. The audit doesn't need to be performed, but the audit needs to be included with the next year's audit? It seems like we need to have assurance on the beginning numbers and to issue a comparative statement of net assets.

:confused:

[actuarysmith]

Either Kirk said the same thing as I did - or I am misunderstanding his response.

The audit for the short plan year is still required. It is just that you allowed to postpone that audit and include with the following full plan year audit. You are not excused from the audit requirement - it is just deferred.

Aren't we saying the same thing?

[Kirk Maldonado]

My conclusion is the same as actuarysmith.

[Guest Christie Banks]

Thanks! I think it was more a matter of semantics than anything else.