A plan with 100 or more participants requires an audit of a plan’s financial standing conducted by an independent qualified public accountant to be submitted along with Form 5500.
One of the well-known secrets over the past 10 years is that the Department of Labor (DOL) is concerned about the quality of audits prepared by certified public accountants. One way they have been doing that is by doing random audits of audits. They will send a letter to a Certified Public Accounting firm with a bunch of requests for documents to ensure that the audit was proper including the engagement letter and work papers.
The audit of the audit is part of the business and I got a little upset when a CPA firm forwarded one of these DOL letters to a plan I work on and cited that per the audit contract, they were entitled to be paid for the work involved. I protested because it’s dealing with the quality of the audit and that should be the cost of the CPA doing business, just like the times I’ve had to answer about the legal opinions I’ve made.
