Compliance

Board Proposes New Standards for ERISA Plan Audits

The proposal addresses the auditor’s responsibilities to form an opinion and report on the financial statements of ERISA plans, and the form and content of such reporting.

By Rebecca Moore editors@plansponsor.com | April 21, 2017

The AICPA’s Auditing Standards Board has issued Exposure Draft, “Proposed Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA,” specific to audits of financial statements of employee benefit plans that are subject to the Employee Retirement Income Security Act (ERISA).

The proposed SAS addresses the auditor’s responsibilities to form an opinion and report on the financial statements of ERISA plans, and the form and content of such reporting, including reporting on specific plan provisions relating to the ERISA plan financial statements and reporting when management imposes a limitation on the scope of the audit in accordance with ERISA section 103(a)(3)(C).

For audits of ERISA plan financial statements only, this proposed SAS would apply in place of AU-C section 700, "Forming an Opinion and Reporting on Financial Statements," and paragraph .09 of AU-C section 725, "Supplementary Information in Relation to the Financial Statements as a Whole."

The proposed SAS also would amend various other AU-C sections in AICPA Professional Standards. Proposed amendments include:

  • Engagement acceptance requirements in addition to AU-C section 210;
  • New performance requirements that serve as a basis for a new reporting requirement, “Report on Specific Plan Provisions Relating to the Financial Statements;”
  • New required procedures when the ERISA-permitted audit scope limitation is imposed;
  • Written management representations in addition to AU-C section 580;
  • Considerations relating to the Form 5500 filing, which the auditor’s report accompanies;
  • Expanded description of management’s responsibilities;
  • Expanded communication on the ERISA supplemental schedules;
  • New form and content requirements of the auditor’s report when management instructs the auditor to limit the scope of the audit, as permitted by ERISA, including expanded auditor’s responsibilities relating to the certified information; and
  • Required emphasis-of-matter paragraphs.

The proposed SAS would be effective for audits of financial statements for periods ending on or after December 15, 2018. The comment period ends on August 21.

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