401k Audit Services

john_farrellI wanted to take a quick moment to tell you what a fantastic job Lisa & Kim did on our 401(k) audit. This is the third year your company has performed an audit for us. Lisa & Kim’s expertise, professionalism, and demeanor is second to none. They gave me the additional push when needed to get this done in a timely manner. All in all, I couldn’t be more pleased. Please ensure they are recognized accordingly.

John A. Farrell III, SPHR - KSJ

We Specialize in 401(k) Audits

401(k) plans are governed by ever-changing rules and regulations issued by the IRS, DOL, ERISA, and the Social Security Administration. These audits are complex.  We will "guide you through" rather than "stumble through" the process.

We offer the following:

  • Help you determine if you are required to have a 401(k) Audit
  • Experience with the rules and regulations of 401(k) plans.
  • Experience in working with your third party administrator.
  • The same audit team from year to year.
  • Quick turnaround to enable you to timely file form 5500.

Note: We also offer 403(b) audit services for nonprofits.

We Perform the Audit at OUR Location, Not Yours, Using YOUR Time Efficiently

Don't pay for a CPA team to come to you, when you can have your audits performed off-site in our office.  We don't believe in your paying for our "Face Time".  Furthermore, this allows for very little interruptions with you and your staff.

While Summit CPA Group is located in Fort Wayne, Indiana, we can audit 401k plans all across the United States. Currently, we are licensed in Alabama, Arizona, California, Colorado, Delaware, Idaho, Indiana, Illinois, Massachusetts, Michigan, Ohio, Pennsylvania, New Jersey, North Dakota, Rhode Island, Tennessee, Texas, Utah, Virginia and Wisconsin.

Starting the audit too early and/or without the proper documents generally results in rescheduling, audit delays, and unnecessary costs. We provide a document list that will be available at the start of the engagement.  The turnaround time from the start of the audit to issuance of your report can be completed in as little as 3 weeks provided we receive the audit information on a timely basis. Critical audit information must be received prior to the start date of the audit.

Inside Our 3-Week Process

Below is a visualization of our team's 3-week workstream process.


 DAY 1-2

  • Meetings:
  • Documents Needed:
    Engagement Letter


    Parties in Interest Listing


    Plan Documents

    IRS Opinion/Determination Letter

    Audit Package/Trust Report

    Asset Certification Document


 DAY 6

  • Meetings:
    Control & Fraud Risks
  • Documents Needed:
    Internal Control Review

    Fraud Risks Review

    Compliance Review

    Fidelity Bond

    Discrimination Testing

    SSAE16 Reports



 DAY 14

  • Meetings:
  • Documents Needed:
    Participant Statements

    Supporting Documents for Test Samples - Eligibility; Deferral; Distributions; Loans; Fees; Contributions; Co. Match/Profit Share


 DAY 15

  • Meetings:
    Review of Issues/Control Deficiencies/Audit Differences
  • Documents Needed:
    Subsequent Event Documentation

    Review of Corrections

    Representation Letter

    Draft Report


 DAY 18

  • Meetings:
  • Documents Needed:

    Parties in Interest Listing


    Plan Documents

    IRS Opinion/Determination Letter

    Audit Package/Trust Report

    Asset Certification Document


 DAY 20

  • Meetings:
  • Documents Needed:
    Audit Report

    Financial Statements w/ Footnotes and Supp. Schedules

    Int. Control Memo

    Governance Memo


Do I Need a 401k Audit? 

An annual Audit is required to be performed by a qualified Third Party CPA firm when certain conditions are met, primarily when total eligible participants reach 100 and the plan is deemed a "large" plan.

Definition of a Large Plan

A Large Plan is a pension (profit sharing, 401 (k), money purchase, etc.) plan that includes over 100 eligible participants at the beginning of the Plan year. A participant is defined as follows:

  • Active participants - those individuals currently employed with the plan sponsor and who are covered under the plan and are receiving credited service. An active participant would include those employees who have elected to participate in the Plan as well as those who are eligible to participate but, have elected not to defer.
  • Retired or separated participants - those individuals who are no longer employed by the employer but who are receiving benefits or are entitled to receive benefits under the Plan. A common example would be a former employee who maintains an account balance in the Plan.
  • Deceased participants - those individuals who are deceased and have one or more beneficiaries receiving or entitled to receive benefits.

If the Plan qualifies as a Large Plan, it must file Schedule H of form 5500 and have the Plan audited by a qualified independent public accountant. If the Plan has under 100 participants at the beginning of the Plan year, it will file Form 5500-SF (Short Form) and forego the required audit. If the Plan is a new Plan, then you must determine the number of participants as of the first day participants were eligible to participate in the Plan.

401k Audit brochure

Two Exceptions to the Audit Requirement

  • Short Plan Year - If the Plan would qualify as a large Plan and its Plan year is seven months or less, the Plan sponsor may elect to defer the audit requirement to the following Plan year. In the subsequent year, if the Plan qualifies as a small Plan, the Plan sponsor will nevertheless be required to have the Plan audited for the short Plan year.
  • The 80 to 120 Participant Rule -If the number of participants reported in Part II, line 6, of Form 5500 is between 80 and 120 and a Form 5500 was filed in the prior year, the filer may elect to complete the current year's Form 5500 in the same category (large or small Plan) as was filed in the previous year. For example, if the number of participants at the beginning of the Plan year is 110, and a Form 5500 was filed in the previous year as a small Plan, the filer may elect to continue to file the short form and forego the audit requirement. However, if the participant count is 121, then regardless of what category of Plan was filed in the previous year, the current year's form 5500 must include Schedule H and the Plan must be audited.

Since the audit requirement is solely dependent on the number of participants, an accurate participant count is critical. A Plan sponsor has the option of distributing participant account balances for inactive participants providing their vested account balance is $5,000 or less. Accordingly, if your participant count is such that you may be required to have the Plan audited, you may consider distributing inactive account balances under $5,000 to the participants prior to the end of the Plan year.

How do you tell if you have over 100 eligible participants?

Check your 401 (k) Form 5500 as filed. If the total number of eligible participants at year-end are over 100, your 401 (k) Plan is required to have an independent CPA Firm audit for this year. If you start at less than 80 you do not need an audit until you have 120 participants.

Document List

The majority of these reports are furnished to us by the custodian of the investments.  Once we are engaged to perform the audit, we will contact the custodian to request that these reports be sent to us.  We will also request from the employer selected copies of its reports generated from its HR and Payroll department as it relates to the 401(k) plan participants. These types of reports can be scanned, mailed, or faxed to us.

Note: We provide an email facility to submit the information securely to us.

  • Information questionnaire
  • Current year census
  • Plan document, adoption agreement, and all amendments
  • IRS determination letter or opinion letter
  • Type ll SOC l Report, formerly SAS 70 report
  • Summary plan description
  • List of all parties in interest.
  • Plan sponsor financial statements
  • Discrimination tests
  • Form 5500 with all supporting schedules
  • Participant trial balance for the Plan year.
  • Distribution forms for selected distributions during the Plan year
  • Loan documents for selected participant loans
  • A schedule of deposits to the Plan on a pay period basic
  • Forms W-2 or other annual payroll registers and reports
  • Form 1099 for distributions
  • Certification report for the Plan custodian
  • Participant statements and trust reports 
Did you know that we offer flat-fee pricing?