Trustee Considerations When Hiring an Audit Firm: Firm ExpertiseBondBeebe
Jason Edwards, CPA
Hiring an auditor can be an arduous endeavor, especially if you’ve yet to experience the proposal process. If you’re a new trustee going through your first RFP, or even a seasoned trustee looking for a new auditor, what are some of the things you should consider? You might think of an audit as just a commodity – something you need to purchase to satisfy your plan’s regulatory obligations. But shouldn’t you get more for your money than a piece of paper with an audit opinion? Of course you should! And in order to do so, here are some considerations for your search, with respect to a firm’s expertise:
- Does the firm have a specialty, or does it do a little bit of everything? How much experience does the firm have within the employee benefits industry and in Employee Retirement Income Security Act (ERISA), Internal Revenue Service (IRS), and Office of Labor-Management Standards (OLMS) compliance? If a firm markets itself as an industry leader, it should have the years, clients, and professional affiliations to substantiate the claim.
- Does the firm simply do business in the industry, or does it lead the industry, influence industry reporting regulations, and interpret new rulings? Will you have to ask your auditors questions, or will they provide you answers before you even know what questions to ask? Is the firm a power player in the legislative and regulatory arena for employee benefits, or merely an innocent bystander?
Ideally, a firm should have experience in the development and regulation of major acts such as the Labor-Management Reporting and Disclosure Act (LMRDA) and ERISA. A firm should also be active in professional groups such as the AICPA’s Employee Benefit Plans Committee and the International Foundation of Employee Benefit Plan (IFEBP) ’s Accountants Committee. Ultimately, the most valuable firm is one that can act as a liaison between your plan and regulators, particularly in the resolution of ERISA, IRS, and OLMS issues.
- Does the audit firm should have experience in assisting clients with the development and implementation of corrective action plans? For plans with existing compliance issues, it is even of greater importance to select a firm with extensive benefits expertise and strong relationships with regulators and other professionals. You should feel confident that, in the event of a routine or special examination by a regulatory body, the firm you select will stand by you and your plan and will help guide you through the investigation.
If you’re able to incorporate these distinctions in your search for an audit firm, your plan will enjoy the significant advantages of receiving high quality service that will ensure your compliance.