Form 5500 is a part of the overall reporting and disclosure framework of Employee Retirement Income Security Act of 1974 (ERISA) that is designed to ensure employee benefit plans are managed and operated according to relevant standards.
Auditors of employee benefit plans review internal controls as a basis for their audit planning. Any significant deficiencies or material weaknesses are communicated to those charged with governance of the plan. So, you receive feedback on internal controls if deficiencies are noted. Additionally, the benefit plan audit provides an independent assessment of your plan’s financial statements. This provides comfort to your plan participants.
Employee benefit plan audits are generally required for companies that provide employee benefit plans to 100 or more participants (this includes eligible, but not participating, as well as separated employees with account balances); these are considered large plans. Plans with fewer than 100 participants are considered small plans and are not required to be audited.
ERISA is a very complicated law to navigate, especially for companies without access to internal resources who understand compliance issues presented by their plans. Additionally, penalties can be assessed to companies for failing to submit a timely audit with the plan’s 5500 tax return. Such penalties can be substantial and are assessed daily beyond the tax deadline.
Our firm has dedicated associates that are benefit plan auditing specialists. We are experienced and knowledgeable about plan standards and regulations. As members of the American Institute of CPAs’ Employee Benefit Plan Audit Quality Center, our firm stays up to date on evolving developments and we receive ongoing benefit plan audit training. Our firm will provide you with quality audits in accordance with professional standards.