The American Institute of CPAs has released a set of questions and answers to help auditors of benefit plan financial statements deal with this complex field and a revised auditing standard.
The AICPA’s Employee Benefit Plans Industry FAQ with Illustrative Auditor’s Reports for Initial Year of Implementation of SAS No. 136, as Amended, gives nonauthoritative guidance on auditor’s reports for the initial implementation year of AICPA Statement on Auditing Standards (SAS) No. 136 — Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, as amended.
The AICPA has been trying to improve the quality of employee benefit plan audits ever since the Labor Department released a report in 2015 on the state of ERISA plan audits (see AICPA pushes for auditing and assurance changes). The Labor Department’s Employee Benefits Security Administration found serious deficiencies in 39% of the audits of employee benefit plans that it examined. In response, the AICPA developed a six-point plan to improve audits, and launched a certification program to better train CPAs on auditing employee benefit plans as part of its Enhancing Audit Quality initiative.
Because ERISA requires the presentation of certain comparative financial statements, the new FAQ resource that debuted Tuesday from the AICPA offers illustrations and options for auditors when reporting during the implementation year of the AICPA’s employee benefit plan auditing standard.
“In the AICPA Auditing Standards Board’s continued efforts to improve the relevance and communicative value of auditor reporting, SAS No. 136 specifically addresses the significant public interest associated with audits of employee benefit plans subject to ERISA,” said Linda Delahanty, senior manager of the AICPA’s Audit and Attest Standards Team, in a statement. “This document provides helpful, non-authoritative guidance to auditors who are now implementing SAS No. 136 for 2020 plan years. Next year, all EBP auditors will implement SAS No. 136 and we expect that they will find the illustrative auditor reports in this FAQ helpful.”