The Proof is in the Audit
SSF’s response to DOL report of low quality employee benefit plan audits
In the past year there has been lot of negative chatter regarding the nation’s increasingly poor quality of employee benefit plan (EBP) audits. A recent report was published by the Department of Labor (DOL) indicated that professional standards are not being met with regard to EBP audits. In fact, the DOL reported that about four out of 10 audits failed to meet the expected professional standards. It also reported that 80 percent of firms in California, the state with the most Certified Public Accountants, audit less than 10 plans per year with a deficiency rate reaching 75 percent. Given these rather staggering numbers, we wanted to ensure that our clients not only have the facts, but feel confident in SSF’s ability to provide quality and accuracy in every audit.
Here are the facts
- The DOL reviewed 400 statistically identified EBP audits
- Deficiency rate averaged 39 percent
- Nearly 300 of the 400 firms audited less than 25 plans a year
- The national failure rate was approximately 70 percent
These poor numbers could indicate that many firms are offering EBP audits without specialization in this area. Since EBP audits are required for plans of a certain size (generally more than 100 participants), there is a high demand for firms to conduct these audits — and when faced with the option, it’s natural for a client to look no further than their existing CPA. However, the DOL’s report proves that while a large number of firms offer EBP audit services, many lack the experience and proper training to conduct them well.
What is SSF doing to ensure consistent quality?
As reported above, 80 percent of California firms audit less than 10 plans a year, whereas SSF audits between 80 and 90 per year. Additionally, SSF has been a member of the AICPA Employee Benefit Plan Audit Quality Center since its inception in 2003. We have also received clean Peer Review reports from the AICPA every review cycle since inception of the Peer Review process. Aside from historical quality, our employees regularly attend trainings, seminars and other trainings to stay on top of developments in the EBP industry and to learn new ways of improving the EBP audit process and efficiency.
If you have any questions about the DOL report, or want to talk to one of our Audit specialists about what you can expect from SSF, please contact us at 925.271.8700 or at firstname.lastname@example.org.