Get the Latest News and Information about 401(k) Audits
The American Institute of Certified Public Accountants has introduced new rules governing audits of ERISA plans. The rules were originally published in July 2019 in a document titled “Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.” In summary, the new rules will change the name of these audits, update the type of opinion provided, and create additional responsibilities for both plan sponsors and auditors.
The coronavirus pandemic may have changed the course of history, but it hasn’t stopped the federal government from enforcing certain requirements designed to protect employee interests. We understand that HR departments already have a ton of their plate managing layoffs, furloughs, re-hires, and everything in between, but you don’t want this public health crisis to cost you more than it already has.
The 401(k) audit is required by law for any business that has over 100 eligible employees. The federal government did not postpone the filing deadline as part of its COVID relief efforts, and so, this is one requirement that you cannot skirt.
An annual 401(k) audit is an essential task for large and mid-sized businesses. Not every company is obligated to conduct an annual audit, but the United States government has set strict rules about which businesses do and don’t need one. You should understand what the 401(k) audit requirements are so that you can follow the proper guidelines for your business.
A 401(k) audit is just one of many recurring tasks you have to think about as a business owner, and it’s easy to let it slip your mind if you’re worried about all of your other obligations. The consequences of missing the deadline can be severe, though, so it’s important that you submit all the necessary documentation on time.
If your business has 100 or more eligible participants at the beginning of the plan year, you must undergo a 401(k) audit. However, choosing the wrong auditor can have severe consequences for both you and your employer. Therefore, it’s crucial to pick the right one for your business.
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