PLANSPONSOR - October/November 2021 - 8

RULES & REGULATIONS
Audit Rule Drives New Duties for Sponsors
R
etirement plan sponsors that must
submit a financial audit with
their Form 5500 filing next year
will find they have more responsibilities
related to the audit.
For background, two main types of
audits are permissible for Form 5500:
limited scope and full scope. A limitedscope
audit concentrates on the plan's
participants and aims to ensure their
accounts are correct, whereas a full-scope
audit delves into more detailed testing of
plan investments. Currently, for a sponsor
to be free to submit only a limited-scope
audit, the qualified institution that
holds the plan's assets must certify the
" completeness and accuracy " of the auditor's
report.
Both the ERISA [Employee
Retirement Income Security Act] Advisory
Council, in 2010, and the Department
of Labor (DOL) Employee Benefits
Security Administration (EBSA), in 2015,
conducted studies on limited-scope audits
and discovered numerous deficiencies,
says Timothy Verrall, a shareholder in law
firm Ogletree Deadkins.
According to the EBSA study, auditors
were failing to evaluate or scrutinize
important data that recordkeepers had
provided; instead, they just signed off on
it. " Some audits were deficient based on
audit standards, and some were deficient
by ERISA standards, " Verall says. " Quality
was all over the place. " It also found that
audit firms with little experience in plan
audits had lower-quality audits, and top
plan auditors had fewer major errors.
Verrall says the study urged the
American Institute of Certified Public
Accountants (AICPA) to modify audit standards
so auditors would do a more thorough
job and ask more useful questions of
the plan sponsor. The result, " Statement
on Auditing Standards (SAS) No. 136,
Forming an Opinion and Reporting on
8 PLANSPONSOR.COM October - November 2021 Art by Tilda Rose
Financial Statements of Employee Benefit
Plans Subject to ERISA, " becomes effective
on December 15.
SAS 136 will bring some big
changes, Verrall says. " Limited-scope
audits aren't limited scope anymore. They
had essentially allowed auditors to take
plan providers' word about inflows and
outflows of cash and not verify information
was correct. "
From the effective date on, limitedscope
audits will be called ERISA Section
103(a)(3)(C) audits. Verrall explains that
the letter the auditor will provide to the
plan management representative will be
more detailed and will require plan sponsors
to first investigate and confirm they
are eligible for this type of audit, which is
an exception to the full-scope audit; they
must then represent this in writing.
" Plan sponsors can expect to get
many questions about whether they're
doing what they're supposed to do as far as
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PLANSPONSOR - October/November 2021

Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2021

INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
To Attract and Retain
2021 DC Plan Benchmarking Survey
Investment Appraisal
The Evergreen Discussion
Retirement, by Auto-Pilot
FIDUCIARY FORUM A Useful Gauge
INSIDE ANGLE ESG for Fiduciaries
PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover1
PLANSPONSOR - October/November 2021 - Cover2
PLANSPONSOR - October/November 2021 - 1
PLANSPONSOR - October/November 2021 - 2
PLANSPONSOR - October/November 2021 - 3
PLANSPONSOR - October/November 2021 - INSIGHTS
PLANSPONSOR - October/November 2021 - 5
PLANSPONSOR - October/November 2021 - INDUSTRY ANALYSIS
PLANSPONSOR - October/November 2021 - 7
PLANSPONSOR - October/November 2021 - RULES & REGULATIONS
PLANSPONSOR - October/November 2021 - 9
PLANSPONSOR - October/November 2021 - 10
PLANSPONSOR - October/November 2021 - 11
PLANSPONSOR - October/November 2021 - UPFRONT
PLANSPONSOR - October/November 2021 - 13
PLANSPONSOR - October/November 2021 - 14
PLANSPONSOR - October/November 2021 - 15
PLANSPONSOR - October/November 2021 - 16
PLANSPONSOR - October/November 2021 - 17
PLANSPONSOR - October/November 2021 - To Attract and Retain
PLANSPONSOR - October/November 2021 - 19
PLANSPONSOR - October/November 2021 - 20
PLANSPONSOR - October/November 2021 - 21
PLANSPONSOR - October/November 2021 - 2021 DC Plan Benchmarking Survey
PLANSPONSOR - October/November 2021 - 23
PLANSPONSOR - October/November 2021 - 24
PLANSPONSOR - October/November 2021 - 25
PLANSPONSOR - October/November 2021 - 26
PLANSPONSOR - October/November 2021 - 27
PLANSPONSOR - October/November 2021 - 28
PLANSPONSOR - October/November 2021 - 29
PLANSPONSOR - October/November 2021 - Investment Appraisal
PLANSPONSOR - October/November 2021 - 31
PLANSPONSOR - October/November 2021 - 32
PLANSPONSOR - October/November 2021 - 33
PLANSPONSOR - October/November 2021 - The Evergreen Discussion
PLANSPONSOR - October/November 2021 - 35
PLANSPONSOR - October/November 2021 - Retirement, by Auto-Pilot
PLANSPONSOR - October/November 2021 - 37
PLANSPONSOR - October/November 2021 - FIDUCIARY FORUM A Useful Gauge
PLANSPONSOR - October/November 2021 - INSIDE ANGLE ESG for Fiduciaries
PLANSPONSOR - October/November 2021 - PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover3
PLANSPONSOR - October/November 2021 - Cover4
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