Not only are 401k audits required in certain situations, but independent audits of employee benefit plan financial statements are an important accountability mechanism.
A financial statement audit can:
- provide an independent, third-party report to participants and plan management
- indicate whether the plan’s financial statements provide reliable information
- assess the plan’s present and future ability to pay benefits
- help protect the financial integrity of the employee benefit plan
- help users determine whether the necessary funds will be available to pay retirement, health, and other promised benefits to participants
The audit also may help plan management improve and streamline plan operations by evaluating the strength of the plan’s internal control over financial reporting, and identify control weaknesses or plan operational errors. The audit also helps the plan administrator carry out its legal responsibility to file a complete and accurate Form 5500 for the plan with the Department of Labor (DOL).