| Dear Center Members: |
This alert contains information about and resources related to a new EBP auditing standard for ERISA plan audits, including:
- SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA
- An EBPAQC audit advisory highlighting key information and new requirements in SAS No. 136
- Overview tool of SAS No. 136 to use in discussions with plan management
This alert also includes information about EBPAQC testimony on the value of an ERISA audit, and registration information for upcoming EBPAQC webinars.
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SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA
The AICPA Auditing Standards Board (ASB) has issued AICPA Statement on Auditing Standards No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA (SAS No. 136 or new EBP SAS). This new EBP SAS is codified in new AU-C section 703 of the AICPA Professional Standards, along with amendments to other AU-C sections. SAS No. 136 prescribes certain new performance requirements for ERISA plan financial statement audits and changes the form and content of the related auditor's report to improve audit quality and enhance the communicative value and transparency of the auditor's report.
SAS No. 136 includes new requirements in all phases of an audit of ERISA plan financial statements including engagement acceptance, risk assessment and response, communication with those charged with governance, performance procedures, and reporting. SAS No. 136 also contains additional performance and new reporting requirements for ERISA Section 103(a)(3)(C) audits (previously referred to as "limited scope" audits).
SAS No. 136 will be effective for audits of ERISA plan financial statements for periods ending on or after December 15, 2020. This means that 2020 year-end audits being performed in 2021 will be required to follow the performance and reporting requirements of SAS No. 136, including using the new form of the auditor's report. SAS No. 136 prohibits early adoption.
Click here for SAS No. 136.
Click here for SAS No. 136 At-a-glance.
Click here for more resources on SAS No. 136
EBPAQC Audit Advisory on SAS No. 136
The EBPAQC has prepared an audit advisory, EBP SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, to inform members of the recently issued EBP SAS for auditors who perform audits of financial statements of employee benefit plans subject to ERISA.
The advisory:
- Provides information about the effective date and adoption of the standard
- Discusses how SAS No. 136 may affect your ERISA audits
- Describes how the new EBP SAS interacts with other auditing standards
- Outlines changes to the "limited scope" audit
- Summarizes changes to the form and content of the auditor's report, including reporting on the ERISA-required supplemental schedules
- Explains other key provisions of the new EBP SAS
Click here for the EBPAQC audit advisory on SAS No. 136.
Overview tool of SAS No. 136 to Use in Discussions with Plan Management
The EBPAQC has prepared a tool, Changes are Coming to Your Benefit Plan Audit, to assist you in talking to your clients about the new EBP SAS. The tool highlights when changes will become effective, the reason for the new EBP SAS, what changes to expect, and changes that affect plan management responsibilities in the audit process.
Click here to download the overview tool.
Guidance and Training on SAS No. 136 Being Devloped
The AICPA is currently updating the EBP CPE courses to include information highlighting SAS No. 136 while noting that implementation of the new EBP SAS is not permitted until the effective date of plan years ending on or after December 15, 2020 (audits performed in 2021). The 2020 AICPA EBP CPE course releases will be fully updated for SAS No. 136 and are expected to be available in November 2020.
The 2020 Audit and Accounting Guide, Employee Benefit Plans (EBP Audit Guide), scheduled for release in January/February 2020, will include a supplement that reflects conforming changes to the guide (by chapter and paragraph) for SAS No. 136. The 2021 EBP Audit Guide, scheduled for release in January 2021, will be fully updated for the SAS No. 136 conforming changes and will include various enhancive updates and guidance on applying the new standard.
EBPAQC Chair Haubrock Testifies on How Plan Administrators Can Maximize the Value of the ERISA Audit
James Haubrock, chair of the EBPAQC Executive Committee, recently testified at the public hearing by the DOL's ERISA Advisory Council. The EBPAQC responded to the Advisory Council's request for "recommendations on actions the Secretary of Labor may take to increase the knowledge and understanding of plan administrators who procure financial statement audit services and to improve the procedures that such plan administrators implement in selecting an auditor." Mr. Haubrock testified how the audit process can help plan administrators fulfill their fiduciary responsibilities by providing an opportunity and discipline to demonstrate due diligence by reviewing and enhancing plan governance, operations, records, internal control, compliance and reporting. He added that by actively participating in the audit process, plan administrators are better able to make proper assertions relevant to the amounts, transactions and disclosures reported in plans' financial statements.
Click here for the EBPAQC testimony.
Register for the July 24 Rebroadcast - Designated Partner 2019 Audit Planning Webinar
The third and final rebroadcast of the 2019 Designated Partner Audit Planning webinar (January 25 live event) will be offered on Wednesday, July 24, 2019 from 1:00-3:00 pm (paid CPE credit option only). This webinar is for firm designated audit quality partners to assist them in preparing their firms for the 2019 EBP audit season. All designated audit quality partners of EBPAQC member firms are required to participate in the annual Designated Partner Audit Planning webinar. If you participated in the January 25 live event or a prior rebroadcast of the event you do not need to participate in this rebroadcast.
Click here to register for the July 24 Rebroadcast - Designated Partner 2019 Audit Planning webinar.
Register for the EBPAQC Health and Welfare Plan Audits webinar - 2-part series (July 25 and August 12)
The EBPAQC is sponsoring two Health and Welfare Plan Audits webinars on Thursday, July 25 (Part 1) and Monday, August 12 (Part 2). Participants will learn the various types of health and welfare plans and plan arrangements; plan operations and claims process; current industry and regulatory environment; audit planning and risk assessment considerations; specific accounting, auditing and reporting considerations; and tips and best practices for auditing these plans. Participants will also have an opportunity to ask questions of the experts. The presenters will include EBPAQC Executive Committee members Debbie Smith, Grant Thornton LLP and Doug Bertossi, CliftonLarsonAllen LLP; Jennifer Lagua, Segal Consulting; and Mark Ritter, Grant Thornton LLP.
Click here to register for the EBPAQC Health and Welfare Plan Audits webinar 2-part series.
Sincerely,
AICPA Employee Benefit Plans Audit Quality Center |
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