In April 2017, the AICPA Auditing Standards Board (ASB) proposed Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The intention of this SAS, like other recent developments of the ASB, is to improve audit quality and relevance of reporting to users, and, in this case, specifically relating to employee benefit plans. One of the focuses of this new reporting model is to better explain the responsibilities of management and the auditors. Additionally, there are also discussions regarding creating a reporting requirement for ERISA plans, similar to that of Yellow Book compliance audits, where any findings from procedures on plan provisions would need to be reported.
The proposed statement includes the following topics:
New engagement acceptance requirements
Changes to the form of the auditor’s report, including:
A new Basis for Limitation on the Scope of the Audit section
Expanded management and auditor responsibilities
An other-matter paragraph on ERISA required supplemental schedules, including an opinion on form and content of the schedules, and
Reporting on findings on plan provisions relating to financial statements
Required audit procedures regarding investment information for which a certification has been provided by a bank or similar institution
The proposal is currently open for comment through August 2017. The effective date for this new proposed SAS is anticipated to be for plan years ending on or after December 15, 2018.
If you have questions about the AICPA's proposed changes to employee benefit plan reporting, contact us for more information.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.