"Qualified" Auditor Opinion

[Andy the Actuary]

What are the practical considerations (e.g., promting audit) of Auditor issuing qualified opinion and checking qualified box, 3a2, on Schedule H?

[bzorc]

What is the basis for the qualified opinion?

[Andy the Actuary]

This has not yet happened. It's a situation where auditor thinks footnote accumulated benefit reporting values re:FAS35 should incorporate RP2014 mortality.

[Bill Presson]

Our parent firm, Warren Averett, does 200+ EB audits per year. I just spoke with our audit partner and he said that about 5% of them are unqualified and the rest are disclaimer (because of the limited scope). He said he didn't recall issuing a qualified opinion and in all the discussions they've had with the DOL that would likely generate a pretty quick contact from EBSA.

FWIW.

[Mike Preston]

I believe the IRS has the right to consider the filing deficient and apply late penalties until fixed.

[Andy the Actuary]

Thank you both. I sensed the same impact as checking the box below the signature on SB that indicates the EA has not fully reflected the law. In short, avoid checking the "qualified" box.

[My 2 cents]

This has not yet happened. It's a situation where auditor thinks footnote accumulated benefit reporting values re:FAS35 should incorporate RP2014 mortality.

Is there anything to stop the enrolled actuary from providing updated ASC-960 (FAS 35) calculations using the SOA 2014 table with projections? That is chargeable work, isn't it? And the calculations needed for accounting purposes are not subject to the "enrolled actuary's best estimate" requirements - the choice of assumptions for those purposes belongs to the plan sponsor. Wouldn't it suffice, at most, to point out that the assumptions were those requested (without a strongly worded qualification being necessary to the effect that the SOA mortality basis is not reasonable in the opinion of the enrolled actuary)? Would it not be worthwhile to avoid having the qualified box checked?

[Peter Gulia]

Is it feasible to include in the financial statements' disclosure not only the values counted under the assumptions the plan's administrator or its actuary used but also under the assumptions the independent qualified public accountant suggests should be used?

Would doing so enable the IQPA to render its report without the qualification?

[My 2 cents]

Is it feasible to include in the financial statements' disclosure not only the values counted under the assumptions the plan's administrator or its actuary used but also under the assumptions the independent qualified public accountant suggests should be used?

Would doing so enable the IQPA to render its report without the qualification?

I would expect that if the accountant wants the numbers based on SOA mortality and someone gives them the numbers based on the SOA mortality, only those numbers will be shown on the accountant's report. And what would be the harm of that?