Does Your Employee Benefit Plan Require An Audit?

Posted on Tuesday, April 12, 2022

The Internal Revenue Service requires companies and nonprofit organizations with over 100 eligible employees, regardless of participation, receive an annual audit of the plan.  

DWD audits employee benefit plans for both initial year plans that are required by the IRS to have additional audit procedures performed as well as on-going plans that are administered by a CPA or TPA firm that is not permitted to audit the plan due to conflict of interest issues. 

DWD is a member of the American Institute of Certified Public Accountants (AICPA) Employee Benefit Plan Audit Quality Center for CPA Firms. This membership is available to firms who demonstrate a commitment to employee benefit plan audit quality and raise awareness of the importance of employee benefit plan audits.  Established in 2004, this center provides the guidelines and tools that CPAs need to perform high quality benefit plan audits. 

Is my plan required to have an audit? 

If your plan has 120+ eligible participants on the 1st day of the plan year, the plan is required to have an audit. 

If your plan has less than 100 eligible participants on the 1st day of the plan year, the plan is not required to have an audit if you file Form 5500 as a Small Plan (Schedule I) rather than as a Large Plan (Schedule H). 

If your plan has between 100 and 119 participants on the first day of the plan year, the plan is not required to have an audit as long as you filed Form 5500 as a Small Plan (Schedule I) in the prior year. 

 I’ve determined that my plan is required to have an audit.  When is it due? 

Employee benefit plans are required to file Form 5500 seven months after the plan year-end.  For calendar year-end plans, this would be July 31st. 

An extension of two and a half months can be granted with the filing of Form 5558.  For     calendar year-end plans, this would be October 15th. 

How do I know which CPA firm should do my employee benefit plan audit? 

Ensure that your auditor is a member of the Employee Benefit Plan Audit Quality Center of the American Institute of Certified Public Accountants (AICPA EBPQC).  Additionally, your auditor should do multiple plan audits each year to ensure they are up-to-date with Department of Labor Regulations. 

Contributed By: Zach Richards, CPA | Director | DWD CPAs & Advisors

Posted in Employee Benefit Plan Audits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.