United States

ASB votes on proposed auditor reporting for plans subject to ERISA


The American Institute of Certified Public Accountants Auditing Standards Board (ASB) recently reviewed and revised the proposed Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, and voted to ballot the proposed SAS by late August for issuance as a final standard. The most significant changes the ASB made to the proposed standard are as follows:

  • The proposed requirement to report on specific plan provisions and include findings in the auditor’s report has not been included in the final standard; instead, the auditor will be required to consider which plan provisions to test as part of risk assessment. Reportable findings, as described in the SAS, would be communicated in writing to management and those charged with governance in accordance with requirements in other relevant AU-C sections.
  • An audit performed pursuant to ERISA section 103(a)(3)(C) no longer will be referred to as a limited scope audit but as an ERISA section 103(a)(3)(C) audit.
  • A new precondition for an ERISA section 103(a)(3)(C) audit will require the auditor to inquire how management determined that the entity preparing and certifying the investment information is a qualified institution under the rules and regulations of the U.S. Department of Labor.
  • The auditor will need to understand or identify which investment information is covered by the certification.
  • The ERISA section 103(a)(3)(C) report will provide a two-pronged opinionan opinion on whether the information not covered by certification is presented fairly, and an opinion on whether the certified investment information in the financial statements agrees to or is derived from the certification. There will be a similar two-pronged opinion on the ERISA-required supplemental schedule(s).
  • The auditor will be required to obtain and read a substantially complete draft of the Form 5500 prior to dating the auditor’s report.

This SAS will be conformed to, and its effective date will align with, the proposed Auditor Reporting standards.