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Necessary Information to Complete Your 401(K) Audit

Published by Kim Moore on Mar 10, 2020 6:00:00 AM

After you select an auditor for your 401(k) Plan, there are some initial items to work through before the audit can begin. Once these items are ready, your auditor will give you a Prepared by Client list (PBC list). Before your audit can be completed you will need to provide all of the requested items on the list. Below is a list of information your auditor will likely request.

  1. Asset Certification Letter if applicable.

  2. Discrimination testing for the year.401k how too--hands_holding_book_custom_16440

  3. Form 5500 Draft.

  4. Plan Census for the year.

  5. Plan Documents – you will need to provide basic Plan information such as the Adoption Agreement, Summary Plan Description, and IRS  Opinion or Determination Letter.

  6. Plan Financial Information (Trust Report, Schedule of Plan Activity).

  7. SOC Reports – SSAE 18 reports.

After the items listed above have been provided, your auditor will select items for testing or walk-through procedures. Not all participants will be tested however, your auditor will review selected items to ensure all transactions were completed accurately and timely. 

Your auditor will also need information from your providers such as:

  • Amortization schedules.
  • Check copies.
  • Enrollment forms or rollover support.

As your auditor works through the testing, they will encounter items that require follow-up or resolution.

The key to working with your auditor is constant communication. Make sure you let them know if something can’t be located or if it’s an unusual transaction. If you don’t understand a request, follow-up to make sure you provide what is needed. Constant dialogue will help make the process as smooth as possible.

When it’s time for an audit for your plan it’s vital that you hire a trusted auditor. At Summit CPA we specialize in retirement plan audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine.  We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance contact our office at (866) 497-9761 to schedule an appointment.

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