AICPA Votes to pass New Audit Standard for Employee Benefit Plans
In December 2018 the Auditing Standards Board (ASB) of the American Institute of CPAs (AICPA) voted to approve Statement on Auditing Standards, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Planssubject to ERISA (EBPSAS). The EBP SAS prescribes certain new performance requirements for an audit of financial statements of employee benefit plans and changes the form and content of the related auditor’s report. It is not applicable nor should it be adopted for plans not subject to ERISA.
This new standard includes new requirements in all phases of an audit of an employee benefit plan including engagement acceptance and terms of the engagement, risk assessment, communications with those charged with governance, consideration of laws and regulations including those specific to employee benefit plans, the application of certain audit procedures over transactions and account balances, and other procedures that have been previously applied in an Employee Benefit Plan audit. Modifications to the written requirements are also addressed.
Significant changes are introduced for the form and content of the auditor’s report on plan financial statements and required supplemental schedules. The new audit standard will have numerous illustrations of auditor’s reports demonstrating the various types of such reports that may be encountered.
Another change is that limited scope audits will be renamed according to the applicable ERISA section “ERISA Section 103(a)(3)(c) Audit”.
When the final SAS is issued it is expected to have an effective date no earlier than for audits of financial statements for periods ending on or after December 15, 2020. Early adoption is not permitted.
Whisman, Giordano & Associates will be discussing the new auditing standards with all of its employee benefit plan clients and associates, friends and other professionals as such audits are performed during 2019.
In the meantime, should you have any questions or wish to discuss this matter further please feel free to call us.
About the author
Joe is a 2004 graduate of Mount Saint Mary’s University, with a bachelor’s degree in accounting. He is also a 2000 graduate of Archmere Academy in Claymont, Delaware. Joe started with the firm in 2002 as a part-time intern, joining full-time in 2004.
Since then, he has worked with a myriad of clients, including entrepreneurial firms, agricultural businesses and nonprofit entities, including those with OMB A-133 audits. Joe, along with the firm, contributes to Toys for Tots, Goodwill Industries, as well as several other community organizations. He is a member of the American Institute of Certified Public Accountants and the Delaware Society of Certified Public Accountants.