Small Form 5500 filed without audit later amending as a large Form 5500 with audit

[AdKu]

A small plan form 5500 (exempt from audit) was filed with DOL for a newly established plan.

But later a client internal auditor found out there were misreporting on the employee/participant payroll data.

As a result, the participant count for this new plan found to be more than 100.

Can this error simply be corrected by amending & filing a large plan form 5500 with audit report?

I would like to hear the opinion of anyone who had the similar issue.

[austin3515]

Sure. It's actually the only option you have. And as your post suggests, the 80/120 rule does not apply to a new plan. A new plan with more than 100 people needs to have an audit. I would commence the audit with haste to minimize the delay in supplying the audit. A few months would likely not be noticed. A year might be!

[AdKu]

Many thanks austin