Auditors are required by professional standards to perform certain procedures with respect to information prepared by a management’s specialist that is used as audit evidence. This tool is designed to assist auditors in documenting their procedures and findings related to their review of appraisals prepared for plan management that are used as audit evidence in their ESOP (sponsored by a privately held company) audits, including their assessment of whether it is necessary to use an auditor’s specialist because the auditor does not have the experience to adequately evaluate the information provided in the appraisal and their evaluation of the auditor’s specialist.
This tool addresses:
Appraisal general information,
Determining the need for an auditor’s specialist,
The appraisal date,
The actuary’s competence, capabilities, and objectivity,
The nature, scope, and objectives of the appraisal,
Assumptions and methods used,
Relevance, completeness, and accuracy of company, industry, and economic information and financial data,
The use of an auditor’s specialist, and
The auditor’s conclusion.
This tool should be tailored to the firm’s employee benefit plan audit practice and the circumstances of the individual ESOP audit. It is not intended for use in the audit of other types of plans, such as profit sharing or stock bonus plans, but may be tailored by the firm for use in those audits.
The tool is not intended for use in the audit of a defined benefit health and welfare plan, but it may be tailored by the firm for use in those audits.