United States

Revised reporting on financial statements of plans subject to ERISA


The Auditing Standards Board (ASB) recently issued Statement on Auditing Standards (SAS) 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, which specifically addresses audits of financial statements of employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), including, but not limited to, the requirements for:

  • Engagement acceptance
  • Audit risk assessment and response, including the auditor’s consideration of relevant plan provisions
  • Communications of reportable findings with those charged with governance
  • The auditor’s responsibilities relating to the ERISA-required supplemental schedules and the Form 5500  

SAS 136 also provides more transparency regarding the scope of the responsibilities of management and the auditor when management imposes a limitation on the scope of the audit, as permitted under ERISA section 103(a)(3)(C). The new form of an ERISA section 103(a)(3)(C) report in SAS 136 requires:

  • A new “Scope and Nature of ERISA Section 103(a)(3)(C)“ section
  • A two-pronged opinion —  an 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
  • Expanded management and auditor responsibilities sections
  • An other-matter paragraph to report on the ERISA-required supplemental schedules

Further, SAS 136 revises the auditor’s report issued when there is no ERISA-permitted audit scope limitation. Among other revisions, the revised report provides more transparency regarding the responsibilities of management and the auditor, as well as revised language regarding the supplemental schedules required by ERISA.

SAS 136 is effective for audits of ERISA plan financial statements for periods ending on or after December 15, 2020. Early implementation is not permitted. Further guidance on SAS 136 is available from the American Institute of Certified Public Accountants (AICPA) as follows:

RSM was actively involved in the development of SAS 136. As former ASB chair, retired RSM partner Bruce Webb initially advocated for a fresh look at the audit requirements for employee benefit plans that are subject to ERISA. Josie Hammond, RSM’s National Director of Employee Benefit Plan Services, a member of the AICPA Employee Benefit Plans Expert Panel and chair of the AICPA’s Employee Benefit Plans Audit Guide Revision Task Force, was a member of the ASB’s Employee Benefit Plan Reporting Task Force. RSM’s National Director of Audit Services, Sara Lord, currently serves as a member of the ASB.