First Year Audit of a Plan

[J Krimmel]

When auditing a 401K plan for the first year it requires an audit, how are the financials dated? The Statement of Net Assets Available for Benefit must be comparative, but this is the first year audited (limited scope). Should we include two years on both statements and mark the prior year as "unaudited"?

[Bill Presson]

Auditors are required to become comfortable with the plan and assets for time periods prior to the beginning of the audit. So they will typically review the plan back a few years to make sure they can report the numbers properly.

If you are the auditor for the plan, your firm should have established practices or contact the Employee Benefit Plan Audit Quality Center if you need additional direction.

[RatherBeGolfing]

What Bill said...

What I am seeing in practice is 2-3 prior years depending on the auditor.  It really should not be a complicated process and most auditors will have a checklist or something similar that you can go through step by step.

 

 

[Peter Gulia]

Beyond the other suggestions, in the AICPA's Audit & Accounting Guide for Employee Benefit Plans, a few Q&As at the end of chapter 11 illustrate what the independent qualified public accountant's report should state or explain when the IQPA did not audit a comparison year's financial statements.

 

[bzorc]

You still prepare a comparative statement, but the prior year is "Compiled" and is noted as such in the auditor's opinion letter.