First, don’t panic! Usually you have not been selected for any particular reason but just randomly selected from the thousands of Plans that file annual reports. There are some things to consider as you prepare for the review:
- You will be asked for a lot of documentation related to the Plan. Most likely, the auditor will ask for copies of the Plan Documents, contribution information, payroll information, HR information, copies of disclosures that should have been disseminated to participants, among other things. You can prepare by reviewing the documentation maintained for the Plan and ensure you have copies of all relevant materials and that the information is organized well.
- Ensure that you are up to speed on current procedures related to the Plan, the internal controls in place and how general operations work for the Plan. This includes the work conducted by the service providers that you utilize for the Plan. The auditor will want to review this information with you to ensure you have proper controls in place over Plan operations.
- Review the contributions made to the Plan to ensure they were all timely. Note that the Department of Labor (DOL) considers large plans should be able to remit plan contributions as soon as administratively feasible to segregate the contributions from Plan assets.
- Consider using outside help with the audit. You may want to use outside resources to help gather the required information requested. You also may want to have on standby outside resources such as an ERISA attorney, tax professional, or if you have used an auditor in the past few years, their assistance as well.
- Once the auditor is on-site, don’t be afraid to ask for clarification on items they are requesting or to answer questions they ask with “I don’t know." You may need to research some items before you can answer specific questions. That is to be expected as the auditor will most likely ask some very specific, detailed questions.
Retirement plans can be very complex. As an innovative firm Summit CPA specializes in 401(k) 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.