Auditor

When selecting an auditor the plan administrator should consider the following:-

Ensure the auditor is licensed:

Federal law requires that an auditor engaged for an plan audit be licensed or certified as a public accountant by a State regulatory authority. When engaging an auditor, you may wish to discuss the auditor's work for other 401K clients. If you have additional questions, you may also wish to verify with the appropriate State regulatory authority that the provider holds a valid, up-to-date license or certificate to perform auditing services.

Ensure the auditor is independent:

Auditors 401k plans should not have any financial interests in the plan or the plan sponsor that would affect their ability to render an objective, unbiased opinion about the financial condition of the plan.

Ensure the auditor has experience with employee benefit plans:

One of the most common reasons for deficient accountants' reports is the failure of the auditor to perform tests in areas unique to employee benefit plan audits. The more training and experience that an auditor has, the more familiar the auditor will be with plan practices and operations, as well as the special auditing standards and rules that apply to such plans.

Ensure you select a quality auditor:

A quality audit will help protect the assets and the financial integrity of your plan and ensure that the necessary funds will be available to pay retirement, health, and other promised benefits to your employees. A quality audit also will help you carry out your legal responsibility to file a complete and accurate annual return/report for your plan each year.

Other Considerations:

Ask the potential auditor if they are a member of the AICPA's Employee Benefit Plan Audit Quality Center.