Can the independent qualified public accountant's report be issued as

[Guest RMM]

Can the IQPA report be issued as "qualified" or "with reservation" or must it be unqualified. The law and regs only require conformity with generally accepted auditing standards. Nothing more, does this mean a qualified report will be rejected by the DOL?

[BeckyMiller]

ERISA Section 103(a)(3)(A) requires that the accountant form an opinion that the financial statements are presented fairly in conformity with GAAP, etc. This means an unqualified opinion. ERISA authorizes the statutory disclaimer for assets that have been certified by a bank or insurance company pursuant to ERISA reg. 2520.103-8.

These are the only forms that are specifically authorized. The DOL continues to review every Form 5500 which is filed including an opinion other than these 2.

If you look at Part III, question 3 on the new Schedule H for Form 5500, you will see that the filing must disclose the type of opinion. This facilitates the government's selection of files to review.

Our experience has been that the government does not automatically reject a filing simply because it has a qualified opinion. The examiner looks at the nature of the qualification. Presumably, they assess the possible consequences of the item that resulted in the qualification or adverse opinion and proceed accordingly.

The point is that a real person looks at each filing when the opinion is something other than unqualified or the statutory disclaimer. So you need to make sure that the filing is in good shape, otherwise.

You should look at Chapter 13 of the AICPA's Audit Guide for Employee Plans. That chapter includes samples of the varying kinds of opinions or disclaimers that accountants can offer in benefit plan audits. Sometimes an unqualified opinion can be offered which includes simply an emphasis paragraph.

[Guest ak]

The DOL's discussion on the new forms just issued speaks about "fair value vs. current value" reporting for insurance contracts on the, e.g., Sch. A. It says that fair value does not apply for investment contracts with insurance companies which are, in part, "..."fully benefit responsive" contracts held by defined contribution plans with assets of $100 million or less". Question: Where did they get the $100 million dollar threshhold? I don't know of any such limit in SOP 94-4 and am not aware of any such amendment to the SOP. Does anyone know the answer.