The EBSA has set December 11 as the deadline for getting answers to its 15 questions about the accountant audit rule and is also seeking additional general comments about other issues that should be considered when revisiting the audit issue.
EBSA officials noted in their request for public comment that federal benefit law prior to the 1974 passage of the Employee Retirement Income Security Act (ERISA) – the Welfare and Pension Plan Disclosure Act of 1958 (WPPDA) – required a certified audit only when the Secretary of Labor found reasonable cause to investigate a plan.
However, EBSA said, lawmakers were not satisfied with that procedure and replaced it with ERISA’s provision requiring employee benefit plans be subjected to an annual audit performed by an independent qualified public accountant (IQPA) and that the accountant’s report be included as part of the plan’s annual report filed with the department.
According to EBSA, the IQPA requirements in ERISA were intended to provide participants, beneficiaries, plan administrators, other plan fiduciaries, and the department with reliable information about an employee benefit plan and its financial soundness.
Section 103(a)(3)(A) of ERISA sets forth the requirements governing the IQPA’s annual audit. The administrator of an employee benefit plan is required to engage, on behalf of all plan participants, an IQPA to conduct an examination of the plan’s financial statements, and other books and records of the plan, as the accountant deems necessary. The accountant is to form an opinion as to whether the financial statements and schedules required to be included in the plan’s annual report are presented fairly in accordance with generally accepted accounting principles (GAAP) applied on a basis consistent with that of the preceding year.
The EBSA notice, including instructions for submitting comments, is here .