Frequently Asked Questions

When is a 401(k) plan required to be audited?

An 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.

If your Plan qualifies as a Large Plan, you 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, you will file Form 5500-SF (Short Form) and forego the required audit. If your 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.

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

Check your 401 (k) Form 5500 as filed. If the total number of eligible participants at year-end is 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.

Are there any exceptions to the audit requirement?

Yes, there are two exceptions to these audit requirements:

  • 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.

What states do you offer a 401k audit in?

We're currently licensed to provide 401k audit services in the following states:

Alabama, Arizona, California, Colorado, Delaware, Idaho, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia

Your state not listed? No worries. It only takes us a few weeks to get registered, and then we'll be able to perform your audit.

What documents do I need to gather?

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 

What's Summit CPA Group's turnaround time?

Critical audit information must be received prior to the start date of the audit. Provided we receive the audit information on a timely basis, our turnaround time from the start of the audit to the issuance of your report can be completed in as little as 3 weeks.

How much does a 401(k) audit cost?

The fee structure for limited-scope 401k audits range as low as $6,500 for plans that fall below 500 participants to as high as $9,500 for plans that fall between the range of 1,000 and 1,500 participants. Plans with greater than 1,500 participants are determined on a case-by-case basis.

Click the below button to generate an instant quote from us based on your particular plan.

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Does Summit CPA Group offer 403(b) audit services for nonprofits?

Yep, we sure do! Give us a call at (260) 497-9761 and we can help you chat through it.

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