The Association of International Certified Public Accountants (AICPA) has elected to pass a new Statement on the Auditing Standard titled Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, to be effective no earlier than periods ending on or after December 15, 2020. The new standard clarifies the auditor’s responsibilities in forming an opinion and reporting of the audit of financial statements of Employee Benefit Plans (EBPs). It also includes the form and content of the auditor’s report, which will be presented in a different format than under current reporting standards.
What’s New with Financial Statements of Employee Benefit Plans Subject to ERISA
Changes to the form and content include an expanded description of management’s responsibilities and results of audit procedures from the auditor’s consideration of plan provisions that affect the risk of material misstatement. This standard also includes new requirements for engagement acceptance, audit risk assessment and response, communications with those charged with governance, procedures for an ERISA Section 103(a)(3)(c) audit (formerly known as a “limited-scope” audit), and considerations relating to the Form 5500, which the auditor’s report is attached to when submitted to the Department of Labor (DOL).
This new standard is expected to be formally issued once the AICPA’s Auditing Standards Board (ASB) evaluates the need for other conforming amendments and holds a final vote, which is expected to occur in the first half of 2019.