Employee Benefit Plan Audits: Independent Assurance for Better Decisions

Assurance Services

Dohan CPA provides employee benefit plan audits for plan sponsors, plan administrators, benefits and human-resources teams, fiduciary committees, third-party administrators, and ERISA counsel. Our objective is a coordinated audit and Form 5500 process that supports participant protection, complete reporting, and timely filing. This guide explains when the service may be needed, what the engagement addresses, how the process works, and how management can prepare.

Who employee benefit plan audits are for

Dohan CPA's employee benefit plan audits are designed for plan sponsors, plan administrators, benefits and human-resources teams, fiduciary committees, third-party administrators, and ERISA counsel. The engagement is organized around the reporting needs of the people who will actually use the statements, rather than treating the audit as a generic year-end exercise.

The intended result is a coordinated audit and Form 5500 process that supports participant protection, complete reporting, and timely filing. Management remains responsible for the financial statements, underlying records, estimates, controls, and representations; the independent CPA is responsible for planning and performing the engagement and reporting in accordance with the applicable professional standards.

When an audit may be needed

Federal law generally requires plans with 100 or more participants to include an audit with the annual Form 5500 filing, although transition rules and exceptions can affect the determination. Some smaller plans can also require an audit if specified eligibility conditions are not met. The plan administrator should confirm status using current Form 5500 instructions and professional advice.

Before accepting a timetable or quote, identify the reporting entity, fiscal period, financial reporting framework, intended users, required report language, delivery date, and any compliance or supplemental schedules. A requirement in a loan, contract, statute, regulatory agreement, or governing document should be read directly rather than summarized from memory.

What makes this engagement different

An employee benefit plan audit connects payroll, eligibility, participant elections, contributions, distributions, investments, service-provider records, plan provisions, and Form 5500 reporting. Much of the evidence may be held by recordkeepers, trustees, custodians, payroll processors, or third-party administrators, so early coordination is critical.

A strong engagement therefore combines technical accounting, industry knowledge, disciplined project management, and timely communication. The audit is more efficient when key schedules reconcile before fieldwork and questions are routed to people who understand the underlying transaction.

Areas commonly addressed

The scope is risk-based and tailored to materiality and the applicable standards. Common areas include:

• Participant eligibility, enrollment, deferral elections, employer contributions, and payroll remittance timing
• Benefit payments, loans, forfeitures, rollovers, hardship distributions, and plan expenses
• Investment valuation, income, purchases and sales, and certified investment information when an ERISA Section 103(a)(3)(C) election is used
• Party-in-interest and related-party transactions, prohibited transactions, fidelity bonding, and fiduciary oversight
• Plan amendments, operational compliance, service-provider controls, cybersecurity, and SOC report considerations
• Reconciliation of audited financial statements and supplemental schedules to the Form 5500 filing

Our audit approach

The exact procedures vary with assessed risks, but a well-managed engagement commonly includes the following work:

• Read the executed plan document, amendments, adoption agreements, committee minutes, and service contracts
• Reconcile participant census and contributions to payroll, trust, recordkeeper, and general-ledger data
• Test eligibility, elections, contributions, distributions, loans, forfeitures, and selected plan expenses
• Evaluate investment reporting and the completeness and qualification of any certification supporting a 103(a)(3)(C) audit election
• Review controls at the sponsor and relevant service organizations, including complementary user-entity controls
• Tie the financial statements and schedules to Form 5500 and communicate adjustments and reportable matters

What the audit does and does not provide

A financial statement audit is designed to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud, and to support the auditor's opinion. Reasonable assurance is a high level of assurance, but it is not absolute assurance and an audit is not a guarantee that every error, control deficiency, improper payment, or instance of fraud will be found.

An audit also does not replace management's responsibilities, provide legal advice, determine the value of a business or property unless separately engaged, or predict future results. Findings and recommendations should be evaluated in the context of the engagement's objective and the organization's risk tolerance.

A practical timeline

Planning should begin before year-end. During planning, confirm scope, independence, deadlines, material locations, confirmation contacts, specialists, prior findings, and client-prepared schedules. After year-end, management closes the books and delivers reconciled schedules. The CPA performs fieldwork, communicates open items, evaluates adjustments and disclosures, obtains representations, and issues the report after all required evidence and approvals are complete.

Calendar time depends on readiness and responsiveness as much as auditor hours. Missing reconciliations, changing trial balances, incomplete contracts, slow third-party confirmations, and late legal or governance information are common causes of delay.

Why work with Dohan CPA

Dohan CPA brings the perspective of a full-service CPA firm serving South Florida businesses, organizations, owners, and high-value individuals. The objective is a technically sound engagement with direct communication, practical request lists, visible responsibility, and attention to the decisions the financial statements must support.

A proposed engagement should be finalized only after Dohan CPA confirms that the service is within the firm's current capabilities, independence requirements, licensing, staffing, and quality-management procedures.

Frequently asked questions

Which plans generally need an audit?

The Department of Labor states that plans with 100 or more participants generally require an audit with Form 5500. Transition rules, the method used to count participants, and small-plan eligibility conditions can change the result, so confirm the filing category each year.

What is an ERISA Section 103(a)(3)(C) audit?

It is an audit in which the plan administrator instructs the auditor not to perform procedures on qualifying investment information prepared and certified by an eligible institution. The auditor still performs procedures over other areas and evaluates whether the election and certification meet applicable requirements.

Who is responsible for the Form 5500?

The plan administrator is responsible for a complete and accurate filing, even when a TPA, auditor, recordkeeper, or other service provider helps prepare it.

Why do auditors request payroll data?

Payroll data supports tests of participant eligibility, eligible compensation, elections, deferrals, employer contributions, and the timing and completeness of deposits.

What is the filing deadline?

ERISA generally establishes a filing deadline within 210 days after plan year-end; calendar-year plans commonly file by the last day of July unless a valid extension or other relief applies. Confirm the date for the specific plan year.

How can sponsors reduce audit delays?

Assign one owner, obtain service-provider reports early, validate the census before delivery, reconcile contributions and distributions, prepare the draft Form 5500, and resolve late remittances or operational issues before final fieldwork.

Authoritative sources

• Selecting an Auditor for Your Employee Benefit Plan - U.S. Department of Labor
• Reporting Compliance Enforcement Manual - Introduction - U.S. Department of Labor
• Form 5500 Corner - Internal Revenue Service

General educational information only. This page is not accounting, auditing, tax, investment, or legal advice and does not create a CPA-client relationship. Requirements and standards can change and depend on specific facts and agreements.