AICPA Releases Proposed Auditing Standards for ERISA Employee Benefit Plans

Chris Gaetano
Published Date:
Apr 21, 2017

The AICPA has released an exposure draft outlining proposed standards for audits of employee benefit plans subject to ERISA (Employee Retirement Income Security Act). The standards come two years after the Department of Labor issued a report expressing alarm at the poor quality of employee benefit plan audits, saying that too many of them, 39 percent, have major deficiencies. The AICPA had been asked by the Chief Accountant of the Department of Labor to take a fresh look at the auditor reporting model for these plans and where there could be improvements, with the institute joining with the department in creating a task force to do so. The exposure draft, released yesterday, is the result. 

The proposal would make several significant amendments to existing standards, and if implemented would be applied in place of AU-C section 700 for audits of ERISA plan financial statements. This means that it would contain many of the same requirements already outlined in current standards. In addition, however, the new standard would also contain: 

*  Engagement acceptance requirements in addition to AU-C section 210
*  New performance requirements that serve as a basis for a new reporting requirement, Report on Specific Plan Provisions Relating to the Financial Statements
*  New required procedures when the ERISA-permitted audit scope limitation is imposed
*  Written management representations in addition to AU-C section 580.
*  Considerations relating to the Form 5500 filing, which the auditor’s report accompanies
*  Expanded description of management’s responsibilities
*  Expanded communication on the ERISA supplemental schedules
*  New form and content requirements of the auditor’s report when management instructs the auditor to limit the scope of the audit, as permitted by ERISA, including expanded auditor’s responsibilities relating to the certified information
*  Required emphasis-of-matter paragraphs

The AICPA is accepting comments on the proposal until Aug. 21, 2017. If implemented, its proposed effect date would be for periods ending on or after December 15, 2018.

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