CPA firms performing both TPA functions and doing the audit.

[R. Butler]

It is fairly well accepted that a firm shouldn't perform both the TPA function and the audit function. There are many CPA firms that do both. Are they just interpreting rules differently or is there is something in the setup of the company that makes it O.K. (i.e. separate divisions)?

[jaemmons]

If the TPA "arm" of the CPA firm only peforms testing, document preparation, and IRS/DOL submission/reporting forms, as most CPA's do, and is not involved in the trading or recordkeeping of the plan's assets, I don't see a problem with the CPA "arm" auditing the financials. I believe I am correct in stating that most are performing limited scope audits anyway, so long as the financial institution where the assets are invested and recordkept, has an updated SAS 70 audit report on file.

The word independence is used as criteria for selecting the CPA, and in my interpretation of this industry requirement, the CPA is auditing the validity of the financial position of the plan and must only be independent of the institution(s) responsible for the financial "functions" of the plan (i.e.- placing trades, statement generation, recordkeeping, distribution processing, ect.) If the TPA "arm" of their firm performs ministerial functions for the plan and is not involved in the aforementioned functionalites, I don't see a problem with having a CPA on staff perform the audit.

However, there may be other practioners which disagree with me.

[Kirk Maldonado]

The DOL standards for purposes of determining if the CPA is independent for Form 5500 purposes is found here: http://www.dol.gov/dol/allcfr/PWBA/Title_2...FR2509.75-9.htm