Comparative financials requirement for a large plan 5500 audit

[Guest Sponias]

I have a plan that will be considered a large plan this year. The CPA who will be performing the audit told me that he is using a "guide" which refers to comparative financials. He is asking if he has to prepare comparative financials this year since it's the first year that the plan is considered to be a large plan.

If you know where I can obtain an answer to his question, please let me know!

[Harwood]

The AICPA guide "Audits of Employee Benefit Plans" states: "E.02 Although generally accepted accounting principles do not require comparative financial statements, ERISA requires a comparative statement of net assets available for benefits."

[Archimage]

Schedule H is setup in this format.

[JanetM]

You will have to use your prior year schedule I data, with a bit more information to complete the H this year. The data on the H should match the data in the financial statements.

I am getting impression the auditor is new to benefit plan audits from your post.

[steve-o]

Per DOL regulations, the statement of net assets available for benefits must be comparative, but the statement of changes in net assets available for benefits may be for the current year only (that one does not have to be comparative, although it can be).

[E as in ERISA]

I'm not sure but if I recall correctly, the beginning numbers might be "unaudited"?

[david rigby]

The role of the original questioner is unclear, but it appears the auditor is asking a non-auditor how to do the audit. That might be a concern.

[Lori Friedman]

I am getting impression the auditor is new to benefit plan audits

Sadly, that's often the case. I work for a CPA firm that specializes in benefit plan audits -- some of the nation's largest labor union plans are our clients -- but many firms pick them up as incidental afterthoughts. Considering what's at risk for every plan fiduciary, a haphazard approach is, at best, unfortunate and, at worst, extremely dangerous.

[bzorc]

To Katherine's post, the statement of net assets available is comparitive. For the year that the plan was a small plan, we provide the information, mark it "unaudited", and include a paragraph in our opinion letter that says the assets for the year in which the plan was a small plan were compiled.