Proposed Update to Auditing Standards for Employee Benefit Plans

In an effort to improve the communicative value and relevance of the auditor’s report, the AICPA Auditing Standards Board (ASB) recently released an exposure draft of a proposed Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.
The proposed SAS would apply to audits of single employer, multiple employer, and multiemployer plans subject to ERISA, and plan sponsors may be directly affected. The proposed SAS includes additional management representations, and the auditor’s report expands on management’s responsibilities for such audits.

The proposed standard includes:

• New performance requirements that serve as a basis for a new reporting requirement, Report on Specific Plan Provisions Relating to the Financial Statements. The report includes findings and can either be included in the auditor’s report on the plan financial statements or issued as a separate report.
• Required audit procedures to be performed relating to the investment information certified by a qualified institution as permitted by ERISA.

The anticipated effective date for the proposed SAS is for audits of ERISA plan financial statements for periods ending on or after December 15, 2018.
AAFCPAs encourages plan sponsors to discuss the implications of this ASU with their AAFCPAs partner, and also consider commenting on the proposed SAS as deemed appropriate.  The comment period for this exposure draft ends on August 21^st, 2017. AAFCPAs will be submitting a comment letter to the ASB and will keep you informed of any updates.
Read the Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA Exposure Draft.
If you have any questions regarding your Plan audit or ERISA compliance, please contact Davide Villani, CPA, Managing Director of AAFCPAs’ Employee Benefit Plan Practice at 774.512.4012, dvillani@aafcpa.com.