401(k) and ERISA Plan Audits: A Practical Guide for Florida Plan Sponsors

For plan sponsors, administrators, and those charged with governance, a 401(k) plan audit is more than a Form 5500 attachment. It is an independent examination designed to support reliable financial reporting and compliance with applicable reporting requirements. Careful preparation can reduce disruption, improve the quality of supporting evidence, and keep the filing process moving.

When may a plan audit be required?

Many employee benefit plans classified as large plans for Form 5500 reporting purposes must attach audited financial statements to their annual filing. Participant-count rules, transition provisions, plan status, and the facts at the beginning of the plan year can affect the determination. Because the rules can be fact-specific, sponsors should coordinate early with their plan administrator, ERISA counsel, and independent auditor.

What does the audit typically cover?

An employee benefit plan audit commonly addresses participant data, eligibility, contributions, benefit payments, investments, income allocation, administrative expenses, participant loans, prohibited transactions, party-in-interest activity, plan tax status, and the presentation of financial statements and supplemental schedules. The auditor also evaluates relevant controls and reconciles plan records to custodial, payroll, and recordkeeper information.

Understanding the ERISA Section 103(a)(3)(C) election

When the conditions are met, plan management may elect an ERISA Section 103(a)(3)(C) audit. Under that election, the auditor does not perform auditing procedures on investment information that is prepared and certified by a qualified institution, but the auditor evaluates whether the certification is complete and whether the certified information is appropriately measured, presented, and disclosed. Management remains responsible for determining that the certification and certifying institution qualify.

How to prepare efficiently

Begin with executed plan documents and amendments, current service-provider agreements, participant census and payroll files, contribution reconciliations, trust and investment statements, distribution and loan support, committee minutes, prior-year financial statements, Form 5500 drafts, and records of compliance corrections. Assign one internal coordinator and resolve differences among payroll, recordkeeper, custodian, and general-ledger data before fieldwork.

Selecting an employee benefit plan auditor

Relevant experience matters because benefit plan audits involve specialized accounting, auditing, ERISA, and Department of Labor reporting considerations. Ask prospective firms about their employee benefit plan practice, quality-control processes, communication cadence, secure document exchange, scheduling, and coordination with recordkeepers and third-party administrators.

Talk with SAS Assurance

SAS Assurance provides independent audit services to employee benefit plans in Orlando, Apopka, Central Florida, and throughout Florida. Our approach emphasizes clear communication, practical planning, and a defined engagement scope. To discuss your plan’s facts and timing, visit https://www.sasassurance.com/contact-us.