Short Plan Year Audit Reports

[Guest lhorne]

I am auditing a 401(k) Profit Sharing Plan that the plan administrators changed the plan year end from 11/30 to 12/31 in 2005. I know that I can defer attaching the audit report to the short plan year Form 5500 to the following plan year Form 5500. How should the financial statements be presented for the following plan year?

Statements of Net Assets Available for Benefits As of December 31, 2006, December 31, 2005 and November 30, 2005?

Statements of Changes in Net Assets Available for Benefits For the Twelve Months, One Month, and Twelve Months Ended December 31, 2006, December 31, 2005 and November 30, 2005?

[austin3515]

There is some debate. Some suggest (including the DOL) that you're really supposed to submit a whole separate report for the short-period, because you may only "defer attaching the auditors report." It doesn't actually say you can merge the two together.

But I spoke to the Chief Accountant's Office at the DOL and was told that "it shouldn't be a problem" if you simply prepared comparative statements with:

12/31/05, 12/31/06 for the balance sheets; and

11/1/05-12/31/05 for the first year's income statement; and

1/1/06-12/31/06 for the second year's income statement.

It seems that the "spirit if not the letter of the law" is satisfied in this way.

[Guest lhorne]

There is some debate. Some suggest (including the DOL) that you're really supposed to submit a whole separate report for the short-period, because you may only "defer attaching the auditors report." It doesn't actually say you can merge the two together.

But I spoke to the Chief Accountant's Office at the DOL and was told that "it shouldn't be a problem" if you simply prepared comparative statements with:

12/31/05, 12/31/06 for the balance sheets; and

11/1/05-12/31/05 for the first year's income statement; and

1/1/06-12/31/06 for the second year's income statement.

It seems that the "spirit if not the letter of the law" is satisfied in this way.

[Guest lhorne]

Thanks Austin. I will pass this info on to the partner-in-charge at my firm and we'll decide how to handle this issue.