Choosing An ERISA Auditor
As the plan sponsor, your fiduciary responsibilities require careful selection of a qualified independent certified public accountant to ensure that your plan has obtained a quality audit in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and the United States Department of Labor (DOL) requirements.
The plan sponsor is considered the plan administrator under law unless another individual or entity is specifically designated to assume this responsibility. ERISA holds plan administrators responsible for ensuring that the plan financial statements are properly audited in accordance with generally accepted auditing standards.
Recent DOL studies of audit quality have identified significant deficiencies in plan audits. Accordingly, the DOL has dramatically increased and revised its enforcement strategies with respect to audit deficiencies. Audit failures can lead to substantial penalties imposed by the DOL on plan sponsors of up to $1,100 per day up to $50,000 per annual report filing.
In conclusion, plan sponsors should use the same scrutiny in selecting their plan auditor as they do in selecting the plan's investment advisor and other professionals providing plan services.
Don't just take our word for it; see what the DOL says about selecting an auditor for your employee benefit plan.