The 401(k) Audit CPA Success Show Summit CPA Group , Anders CPAs + Advisors

Episode Summary
The latest Department of Labor (DOL) Audit Quality Study dives into where the most errors in an employee benefit plan (EBP) audit occur and why the practice has become more specialized than ever. Audit firms with less experience in 401(k), 403(b) and other types of EBP audits have higher average rates of errors compared to more experienced firms. Kim Moore, director and 401(k) audit practice leader, and Karen Hill, audit and assurance manager, discussed the results of the study and what implications it holds for businesses undergoing an EBP audit.

To make 2024 an even more successful year, plan sponsors and administrators should commit themselves to being more proactive rather than reactive when it comes to your 401(k) plan. Even if a third-party administrator monitors your 401(k) plan, important tasks can be overlooked and vital deadlines missed, resulting in expensive fines. As the first deadlines for 401(k) audits approach, consider taking the actions set out by Anders 401(k) director and practice leader Kim Moore and audit and assurance manager Karen Hill for punctual deliverables and improved processes.

As the year-end and the final Form 5500 deadline approaches, 401(k) plan administrators and sponsors should take this time to review their plan documents to ensure their continued compliance with ERISA, Department of Labor and IRS compliance requirements. Neglecting to secure a Fidelity Bond, failing discrimination testing, making errors on your Form 5500 and other compliance mistakes can lead to hefty fines you could be deemed personally liable for if they negatively impact participants in the plan. Reviewing these common 401(k) plan missteps can help you identify compliance issues within your own plan before they negatively impact plan participants.

After a surge in the number of cyber-attacks on businesses, most have changed the way they utilize cybersecurity protections. Has your 401(k) plan done the same? To ensure your plan, assets and participants remain safe from cyber criminals and fraudsters seeking to exploit security vulnerabilities in your system, complete annual risk assessments, review internal and customer controls, and invest in an insurance plan before a breach occurs. As a plan sponsor, doing so is your fiduciary duty. Failure to do so can result in costly court battles that you’re unlikely to win.

Filing Form 5500 correctly and on time is imperative for 401(k) plan sponsors or administrators. Inaccuracies or missed deadlines can result in penalties and other fines. First-time filers may also be curious about which schedule applies to their plan and how they can ensure they’ve selected the correct option. Director and 401(k) Audit Practice Leader Kim Moore and Audit and Assurance Manager Karen Hill give an overview of Form 5500, important deadlines to keep in mind and other tips for ensuring the all-important tax document is able to be filed on schedule.

By now, companies who have reached the 80-120 employee benchmark have learned that they will need a 401(k) plan audit this year, but they may not have a solid idea of what steps come next in the process. Director + 401(k) Audit Kim Moore and Manager + 401(k) Karen Hill detail what plan sponsors need to do and when, plus advice on how to make sure you find an auditor qualified to take on highly technical and regulated employee benefit plan audits.