Selecting an Employee Benefit Plan Auditor
April 14, 2007

Generally, a qualified retirement plan is required to be audited if there are 100 or more participants as of the first day of the plan year. In addition to the legal requirement, the audit also helps protect the assets of the plan and helps ensure that a complete and accurate IRS Form 5500 is filed. One of the most important responsibilities of the plan administrator is to hire an independent auditor. The DOL has an informative article, Selecting An Auditor For Your Employee Benefit Plan, which includes a section on selecting an auditor. This blog post also discusses factors to consider when hiring an auditor for your qualified retirement plan. Here are some things to consider:

• Don’t automatically use your corporate auditor.
• Make sure that your auditor is truly independent, both in fact and appearance. They should not have any financial interests in the plan or the plan sponsor that would affect their ability to render an opinion. Financial interests may include other work performed by the firm.
• Consider going through a competitive bidding selection process. Some factors to consider include: cost, employee benefit plan audit experience (both firm experience and the experience of the audit team assigned to your plan), training and continuing education, and audit team turnover.