Generally, Federal law requires employee benefit plans with 100 or more participants to have an audit as part of Form 5500. Selection of your plan’s auditor is one of the most important duties of the plan administrator so the Department of Labor provides guidance to selecting an auditor at httpss://www.dol.gov/ebsa/publications/selectinganauditor.html.
- The auditor is licensed or certified as a public accountant by a State regulatory authority.
- The auditor does not have any financial interests in the plan or the plan sponsor that would affect their ability to render and objective, unbiased option about the financial condition of the plan (having a Madoff flashback?).
- The auditor has the depth of experience needed to perform this service by checking their references. The DOL and AICPA state that the most common reason for deficient accountants’ reports is the failure of the auditor to perform tests in areas unique to employee benefit plan audits.