Be Careful With Plan Auditors
Plan fiduciaries should be careful when they choose, and retain, auditors. That may seem obvious, but the Department of Labor (DOL) has been pursuing an effort to provide information about plan audits and advising care in the selection of auditors.
In “DOL’s Audit Quality Outreach Continues
,” Morgan Lewis partner R. Randall Tracht and associate Elizabeth S. Goldberg discuss the DOL effort.
Tracht and Goldberg discuss “Assessing the Quality of Employee Benefit Plan Audits
,” a report the DOL issued earlier this year that concerned the Employee Benefits Security Administration (EBSA) assessment of the quality of audits independent qualified public accountants performed in 2011 for employee benefit plans subject to ERISA. They note that EBSA found a 39% deficiency rate for the audits and that the report’s recommendations include increasing DOL outreach and enforcement regarding audit standards.
They also cite the recent letters that the DOL sent as part of its effort, which they report highlights the risks plans face at the hands of auditors that render “substandard audit work.” They add that in the DOL also cautions plan administrators to be careful when they choose an auditor and offers ideas to help them do so.
Tract and Goldberg argue that although the DOL letters do not identify specific plans that they intend to investigate or take enforcement actions against, they do nonetheless serve as “important reminders” of the approach the DOL suggests plan fiduciaries take.