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After 20 years of being involved in employee benefit plan audits, we have heard this question many times.

Thanks to the AICPA's Employee Benefit Plan Quality Center (EBPAQC), there is a place for committed firms, like Amper, to show their commitment and get assistance with continuous improvement of employee benefit plan audits.

Diane Wasser, Partner and Partner in Charge of Amper's Pension Services Group, sits on the Executive Committee of the EBPAQC and is deeply involved and committed to educating the profession on improving audit quality and understanding the unique aspects of a Plan audit.

In order to be eligible for membership in EBPAQC, firms must:

• Designate an audit partner to have firm-wide responsibility for the quality of our ERISA employee benefit plan audit practice.


• Have all audit partners eligible for AICPA membership be members of the AICPA.


• Establish a program to ensure that all ERISA employee benefit plan audit engagement personnel possess current knowledge, appropriate to their level of involvement in the engagement, of applicable professional standards, rules and regulations for ERISA employee benefit plan audits and further comply with specific Continuing Professional Education requirements.


• Make publicly available information about our most recently accepted peer review.


• Establish written policies and procedures specific to our ERISA employee benefit plan audit practice to comply with the applicable professional standards and EBPAQC membership requirements.


• Establish annual internal inspection procedures that include a review of our ERISA employee benefit plan audit practice.


• Assure employee benefit plan audits selected as part of our peer review are reviewed by individuals employed by an EBPAQC member firm.

Over the years we have heard many excuses as to why a quality Plan audit may not be of primary concern to Plan Sponsors. Here are some of those excuses along with rebuttals.

1. Excuse:
   We (plan administrator) timely file our Form 5500 every year; our plan's auditor isn't the greatest, but they are quick, cheap and hardly ask for any supporting documentary evidence.
   Rebuttal:
   A quality audit assists a Plan Administrator in carrying out its legal responsibility to file a complete and accurate Form 5500 for each plan, each year. An incomplete, inadequate or even untimely audit report can result in penalties being assessed against the plan administrator. These could be as much as $50,000 per plan, per year.
2. Excuse:
   Our plan isn't that difficult, we don't need a firm as qualified as yours to do our Plan audit.
   Rebuttal:
   We will most likely see you in a few years when you get your letter from the Department of Labor regarding a substandard audit and we'll try to bail you out of perpetuating that $50,000 penalty year after year.
3. Excuse:
   I like the Plan auditor we have now; they only audit our one plan so we get their full attention.
   Rebuttal:
   One of the most common reasons for deficient audit reports is failure of the auditor to perform tests in areas unique to employee benefit plans, for example participant detail. Special, unique audit standards and rules apply to plan audits.
4. Excuse:
   We have over 100 eligible participants now, but probably won't in a few years so we'll wait and see if they catch us.
   Rebuttal:
   See number 1 and if you think of "tweaking" the number of participants reported on the Form 5500 read on. A $100,000 fine and/or 10-year imprisonment apply to individuals for willful violation of the reporting and disclosure requirements of ERISA ($500,000 for corporations). These can be sought in cases of false statements on ERISA documents including 5500's.

Company representatives making decisions on behalf of an employee benefit plan are fiduciaries. Fiduciaries are those who manage employee benefit plans and their assets and make decisions regarding the Plan. Being a fiduciary is a serious responsibility. They are carrying out responsibilities on behalf of the Plan, including fulfilling its annual reporting obligations under ERISA.

Amper has devoted significant resources to the employee benefit plan audit area and has devised a streamlined approach that employs Amper's Best Practices, all which provide Plan Sponsors with a quality audit necessary to fulfill their annual reporting obligations.