Doing The Right Way
A Comprehensive Guide of Employee Benefits Plan Audit
It is required by the law for all the company that offer employee benefits to more than 100 employees to hire a certified CPA firm for employee benefits plan audit. The audit is meant to ensure that the company complies and meet the fiduciary responsibilities. Carrying out an employee benefits plan audit requires a high degree of expertise, and there are standards that should be met hence you should be careful when choosing a CPA firm to do it. The audit report will only be accepted by the DOL if the standards set by the Internal Revenue Code are met. Through the audit, a business can identify the areas that it can improve the performance regarding employee benefits. Some of the vital aspects that the CPA firm will look into when carrying out the employee benefit plan audit include 401(k)s, pension plans, savings plans, and union representation among others.
Despite the many benefits of an EBP audit, the number of companies that hire an independent CPA firm to do it is quite low. Since it is a legal requirement, you should ensure that you carry out the audit if you want to avoid the possible penalties. If you are looking for a reason to have an EBP audit, you should look at the possible consequences and penalties that your business is likely to face. The other reason why you should consider EBP audit is to avoid financial fraud and abuse. There will be no need to worry about internal errors and employee deception.
Using the EBP audit report, you can identify the potential areas that will help you save money and streamline employee benefits. Even if you spend money to hire a CPA firm, you will realize that it is money-saving in the long run. The report provided accurate and clearly organized data that can help you make well-informed decision regarding the existing employee benefit plans. After the audit, you will become a better human resource manager and financial resource manager to your business.
Since an EBP audit is beneficial to a company or business in several ways, you should view it as an important opportunity to perfectly understand the financial well-being of your company. Ensure that you hire a CPA firm that has a team that is familiar with the IRC guidelines so that you can realize the associated benefits. Click here to learn some of the factors that you should consider when choosing a suitable CPA firm for employee benefits plan audit.
The decision to hire an audit firm should be made after outlining all the areas to be covered. Using the information provided in this article, you can make better decisions regarding an EBP audit as it is beneficial in several ways.