What Questions Should I Be Asking My 401(k) Auditor?

By Mary Kathryn Treusdell

When it comes to selecting your 401(k) auditor, plan sponsors sometimes do not consider the ramifications of not engaging a quality auditor. If a plan has prohibited transactions, missed contributions, or ineligible party-in-interest transactions, it could lead to big headaches at the plan sponsor or even a secondary audit by the Department of Labor (DOL). Thus, it is the plan sponsor’s fiduciary responsibility to engage a quality auditor who can provide a level of assurance that the Plan has accounted for its plan assets appropriately. In order to get an idea of the level of experience potential audit firms have with respect to 401(k) audits, plan sponsors can consider asking the following questions to the potential firms they are interviewing:

  1. How many defined contribution plans does the firm audit each year?2. What is the extent of specific annual training your 401(k) auditors receive each year?3. What is the status of your firm with your state Board of Accountancy?

    4. Has your firm been the subject of any prior DOL findings or been referred to your state Board of Accountancy for investigation?

    5. Does your firm have its defined contribution plan audit work peer reviewed? If so, have these reviews ever resulted in negative findings?

The first question is one of the most important questions.   The DOL’s audit failure findings support the basic assumption that if a firm is auditing less than five plans a year, they probably are not providing a quality audit.

If you have any further questions or would like a quote for a 401(k) audit, please contact Mary Kathryn Treusdell at Hall Albright Garrison & Barnes P.C. (mtreusdell@hallalbright.com).