Department of Labor: Audit Quality Matters

Department of Labor: Audit Quality Matters

The U.S. Department of Labor's recent national study on audit quality revealed deficiencies in 39% of employee benefit plan audits - and the critical importance of working with a highly qualified CPA firm such as Gray, Gray & Gray.

The U.S. Department of Labor (DOL) recently contacted all employee benefit plan administrators regarding the quality of their annual benefit plan audits. The letter was a follow up to a national study by DOL on audit quality that revealed deficiencies in 39 percent of the more than 81,000 employee benefit plan audits conducted annually. The DOL estimates these deficiencies "put $653 billion and 22.5 million plan participants and beneficiaries at risk."

The letter, which was emailed from the Office of Chief Accountant of the DOL, stressed that "selecting a qualified CPA who has the expertise to perform an audit in accordance with professional auditing standards is a critical responsibility in safeguarding the plan's assets and ensuring compliance with ERISA's reporting and fiduciary requirements."

The letter goes on to state that "employee benefit plan audits have unique audit and reporting requirements and are different from other financial audits, and that substandard audit work can be costly to plan administrators and sponsors."

The DOL outlined several factors that indicate a CPA firm is qualified to perform a benefit plan audit, including:

The number of employee benefit plans the firm audits each year, along with the type of plans
The extent of annual training conducted in auditing benefit plans
Status of a CPA's license with their state board of accountancy
Whether the firm has been subject to any prior DOL findings, or has been referred to the state board or AICPA for investigation
Whether the firm's benefit plan audit work has been "peer reviewed" by another CPA firm

As part of the nationwide assessment of audit quality, Gray, Gray & Gray has received a letter from the DOL Office of the Chief Accountant stating that our work fully complied with professional auditing standards and contained no deficiencies. This reflects our investment in experienced audit personnel and ongoing training to keep pace with the evolving nature of the benefit plan audit process.

If you have questions about your company's employee benefit plan audit, please contact Gray, Gray & Gray at (781) 407-0300 or visit our

Employee Benefit Plan Audits web page.

We go beyond the numbers by delivering insight, guidance and success to our clients.

Gray, Gray & Gray, LLP
781.407.0300

www.gggcpas.com

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