Small Plan Audit for Non-Qualified Assets

[dmb]

Are the requirements for the Small Plan Audit for plans with greater than 5% of assets considered non-qualified the same as the Audit for plans with over 100 participants?? Is it stated anywhere that the Small Plan Audit must be done on a cash or accrual or a hybrid method?? And must the audit match the Form 5500?? Any other info would be appreciated. Thanks.

[Theresa Lynn]

The audit is the same as if the plan suddenly were subject to the large plan audit rules. The audit must be of the current and past financial statements; thus, they should be in accordance with the plan's records. If the plan records are on accrual basis, the report and audit would be based on accrual records...

The Form 5500 instructions (Schedule H) permit records on either basis.

The records and audit should be based on the plan year(s).