That depends on who you ask. If you ask an employer that takes their fiduciary obligations seriously, or one that has had problems with their plan in the past, then the audit is very valuable. However, if you ask an employer that is not so in-tune with their fiduciary obligations and views the audit as a commodity that goes to the lowest bidder, then the audit is a hassle and of little or no value.
For many, a benefit plan audit is not an option:
Once a retirement plan falls into the large plan category, an audited financial statement is Continue reading »
What triggers an audit? Plans are typically selected from filed returns such as Form 5500s, but for plans that don’t have to file returns, the IRS downloads data from W-2 employer’s report and look for things such as exceeding contribution limits. However, the agency often randomly selects plans among different types of sponsors and different industries. Daniel S. Gardner, Senior Employee Plan Specialist for Tax Exempt and Government Entities, Internal Revenue Service, described what the IRS is looking for – and has found – when auditing 403(b) plans. Continue reading »