Audited Plan (Schedule H) - Cash or Accrual Basis

[jmartin]

Every audited plan I have seen used accrual accounting where you would indicate receivables on the schedule H. Can an audited plan use cash basis accounting for 5500 purposes?

[ESOP Guy]

Your question is a bit vague or odd in my opinion.  

I don't think the auditor's report can be on a cash basis as GAAP won't allow it.  

The plan can use cash basis accounting and prepare the Sch H that way. 

If that is done something has to be done about the differences between the Sch H and the auditor's report.  If the auditor is up for it they can prepare a reconciling schedule in their footnotes reconciling the differences.   If they are willing to do that life is grand I guess.  For some reason many auditors don't like those reconciling schedules.   Maybe an auditor who comes around here can give us insights.  

So short answer as far as I can tell is "yes" an audited plan can use cash basis.   If someone wants to tell me I am wrong fine with me.   You just have to work out the issues with the auditor and their audit report vs the Sch H.  

[ratherbereading]

I have a large plan for which I do the Schedule H on a cash basis and the auditor provides notes that go with the 5500. 

[TommyGunn13]

I agree, and have worked on large plans that report 5500 on cash basis and the auditor footnoted the audit report to reconcile to the 5500.  Did not see it very often.