When you need a retirement plan audit for your organization, trust the experienced Chapel Hill CPA’s at Steward Ingram & Cooper. Since 2000, companies have relied on us to provide accurate full-scope and limited-scope audits to ensure the plan you offer meets standards set by the Employee Retirement Income Security Act of 1974 as well as making sure it meets the specific benefits you have promised your employees. We will work with you to help you maintain compliance, provide unbiased results, and help you take corrective action where needed.

Understanding Retirement Plan and 401K Audits

Under the Employee Retirement Income Security Act of 1974 (ERISA), all employee retirement and benefit plans must be audited by an independent certified public accountant. The financial statements that are audited must be attached to Form 5500 — the retirement plan’s annual tax return form.

These audits are overseen and enforced by the U.S. Department of Labor and require generally accepted accounting principles (GAAP) as an accepted financial reporting framework. In addition to GAAP, the auditor must also ensure that all allocations are correct and test the timespan for the employer or plan sponsor to remit employee contributions to the plan.

Who Is Required to Have a Retirement Plan Audit?

Any business or organization with over 100 participants in the retirement plan must have an audit performed annually. While there are exceptions to the rule, it’s important to discuss these specifically with your ERISA attorney, administrator, or plan record keeper.

Full-Scope versus Limited-Scope Plan Audits

An employer can choose one of two types of audit: a full-scope or limited-scope audit.

A full-scope audit includes auditing all of the plan’s financial statements and notes related to it. A full-scope audit covers:

  • Reviewing plan documents to verify compliance with both the IRS and Department of Labor guidelines.
  • Checking for amendments made to the plan over the course of the year.
  • Verifying the accuracy of the information reported on Form 5500 as well as financial statements.
  • Assessing electronic 401k record maintenance.
  • Verifying that distributions are paid properly.
  • Checking employee contributions with remittance dates to ensure they are remitted in a timely manner.

A limited-scope audit excludes procedures related to certain investments. Typically, a limited-scope audit does not require the auditor to look into the investment balances and related investment income held by a qualifying financial institution. Thus, this option is only available if the retirement plan’s assets are held by a bank or insurance company that must follow federal agency regulations and examinations.

Initial Audit Requirements

A company’s first audit requires more in-depth procedures. Our auditors will have to look into your retirement plan’s beginning balances for the year being audited, and several years may require testing to ensure balances are correct. Failing to do so may lead to non-compliance with the Department of Labor.

Choosing the Right Retirement Plan Auditor in Chapel Hill

When you need to have your employee benefit plans audited, you need a CPA with extensive knowledge of the task ahead. At Steward Ingram & Cooper, we offer comprehensive auditing services, including initial audits, full-scope, and limited scopes to best meet your needs. We work efficiently and are dedicated to providing compliant, accurate information to you and the necessary government entities. In addition to Chapel Hill, we also serve businesses in Durham and the surrounding areas.