Retirement Plan Audit: The Role of Your Investment Consultant

Your retirement plan consultant can play a helpful role in assisting you with your plan’s yearly plan audit. Retirement plan audits are essential for ensuring compliance with various regulatory requirements and safeguarding the interests of plan participants. However, they can also be complex, cumbersome, and time consuming.

Here are a few ways your fiduciary retirement plan consultant can support you in this process, including information on your SAS 114 and SAS 115 auditor letters.

  1. Helps you understand the purpose of the audit

Retirement plans governed by the Employee Retirement Income Security Act (ERISA), such as 401(k)s, are subject to annual audits for plans with 100 or more participants.

Audits ensure that the plan's financial statements are accurate and that the necessary protections are in place to protect plan participant interests.

  1. Helps you with the selection of an independent auditor

The selection and review of your retirement plan auditor is a fiduciary function. A retirement plan consultant can often assist plan sponsors in selecting a qualified and independent auditor. The auditor should be experienced in conducting employee benefit plan audits and familiar with the specific requirements applicable to retirement plans.

  1. Helps you with the coordination with your auditor on SAS 114 and SAS 115 letters

SAS 114 addresses the auditor's responsibility for detecting and communicating material misstatements in the plan's financial statements, emphasizing the importance of internal controls.

SAS 115 addresses the communication of internal control-related matters identified during the audit.

Many retirement plan consultants facilitate communication between the plan sponsor and the auditor, ensuring that SAS 114 and SAS 115 letters are properly addressed and documented in the minutes of the fiduciary committee.

For more information on the SAS 114 and SAS 115 letters, you can read our blog, which goes into more detail.

  1. Helps you understand which documents and data to gather and review

Your consultant should be able to help you understand the necessary plan documentation, including financial statements, participant data, and other relevant records that are needed in preparation for the audit.

  1. Reviews the audit after completion and provides recommendations

After the audit is complete, you may benefit from reviewing the findings with your consultant who may provide you with recommendations for any necessary improvements or changes to ensure continued compliance.

In summary, a competent retirement plan consultant can play an important role in helping the plan sponsor, through the annual audit process; from selecting auditors to addressing SAS 114 and SAS 115 letters and ensuring ongoing compliance for the benefit of plan participants and fiduciaries.

Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice.

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