401k audit

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Following you will find the description for the last issue (2006) of our Audits of 401k Plans CPE program. Please keep in mind that the description was for this particular program. A new author may choose to redo the program in some other way or write a new program altogether.

Generally Accepted Auditing Standards and Generally Accepted Accounting Principles apply to employee benefit plans. This program assumes that the participant is reasonably knowledgeable in the fields of accounting, tax and auditing to the extent necessary to identify issues with the Form 5500 pertinent to the audit.

The purpose of this program is to assist the independent qualified public accountant (IQPA) to properly conduct the work necessary in the audit of 401(k) defined contribution retirement plans. The materials are designed to help the auditor identify important issues in the process of the audit. This material assumes that the reader is reasonably knowl­edgeable of generally accepted auditing principles (GAAP), generally accepted auditing standards (GAAS), ERISA and the IRC as it relates to 401(k) plans.

Thus, rather than a general discussion of GAAP and GAAS standards, ERISA law and regulations, and the tax code (which would easily take up many volumes!), this material focuses on and attempts to meld together the unique ERISA and tax issues involved in the accounting, tax reporting and ultimately the auditing of the financial statements of 401(k) employee benefit plans.

Since most practitioners will deal with single employer sponsored 401(k) plans, the materials focus on single employer sponsored plans.

At times, comments on multi-employer sponsored 401(k) plans will be made when applicable to the discussion. A multi-employer sponsored 401(k) plan should be treated as a single-employer plan for purposes of reporting to the regulatory agencies: DOL and IRS, and sometimes the SEC.

This program is divided into seven (7) chapters, two (2) appendices and a topical index. Chapter 1 provides some background information on 401(k) plans. Chapter 2 concerns planning a 401(k) audit. Chapter 3 focuses on internal control issues associated with 401(k) plans. Chapter 4 discusses audit issues associated with 401(k) plan financial statements. Chapter 5 reviews additional 401(k) plan audit issues. Chapter 6 discusses the financial statement disclosures related to a 401(k) plan. Chapter 7 provides information on the auditor’s reporting requirements for a 401(k) audit. Appendix A is a glossary of terms related to 401(k) plans. Appendix B is a quick reference to Form 5500, who files and what to file.

Upon completion of this program the user should be able to: (1) understand the basic features of a 401(k) plan; (2) understand the general features, administration, reporting requirements and opera­tions of 401(k) plans; (3) define the general reporting requirements for 401(k) plans; (4) understand the requirements for 401(k) audits: full scope and limited scope; (5) identify risk areas, plan and conduct 401(k) audits more efficiently and effectively

Be aware of and avoid typical audit and reporting deficiencies; and (6) recognize new tax, accounting and regulatory developments affecting 401(k) plans and their effect on the audit.