Every company or business organizations that provide employee benefits for more than 100 employees requires an employee benefit plan audit by a certified accounting firm. The objective of the audit is to ensure that the company meets the fiduciary responsibility as required by the law. Carrying out the audits of employee benefits plans 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. The primary purpose of an employee benefit plan audit is to identify the areas that the company should improve and manage the benefits well. Some of the vital aspects that the CPA firm will look into when carrying out the employee benefit plan audit include the 401k, pension plans, savings plans, and union representation among others. Note that this work can only be done by an SOC auditor.
Most companies fail to conduct an employee benefit plan audit in as much as it is required by the law since they do not understand the benefits. 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. The business assets will be safe since issues such as internal errors and employee deception will be eliminated.
After the audit, you can use the EBP report to identify the areas that can help you save money on your employee benefits plans. In as much as you will spend by hiring an independent accounting firm, you will get to save a lot of money in the long run in your employee benefits plans. An accurate and properly organized audit report can provide a manager with useful data in making better decisions. After the audit, you will become a better human resource manager and financial resource manager to your business.
Based on these benefits, an EBP audit is an excellent opportunity for business managers to understand the financial well-being for the business. 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. Here is a guide to use when looking for a suitable CPA firm for an EBP audit.
Figure out all the areas that should be covered during the audit before hiring a certified accounting firm. Now that you are well-informed about the benefits of employee benefits plan audit, you should consider it for your business. To learn more on this topic, click this link: https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/businesses-and-occupations/auditing.
