FYI Auditing Employee Benefit Plans - GAAS—Audits of employee benefit plans should be conducted according to generally accepted auditing standards; the audit takes into consideration relevant compliance issues, but the audit is not designed to ensure compliance with applicable laws (such compliance is the responsibility of the plan administrator, not the auditor).

The DOL requires plan financial statements to be filed on Form 5500, Annual Return/Report of Employee Benefit Plan; the financial statements may be based on GAAP, the cash basis, or the modified cash basis of accounting; the DOL also requires the auditor to express an opinion on whether the financial statements and supplemental schedules comply with applicable DOL requirements. ERISA section 103(a)(3)(C) audits (formerly known as limited-scope audits) 1. DOL regulations permit the plan management to elect to omit certain investment information from the audit when such investments are held and certified by a qualified institution (e.g., an insurance company, a bank, or a trust company that is subject to periodic state or federal examination) 2. The qualified financial institution holding these plan assets must furnish a certification that the investments and related investment activity are “complete and accurate”; without an acceptable certification, an ERISA section 103(a)(3)(C) audit is not permitted