| Dear Center Members: |
This alert contains information about:
- 2020 AICPA EBP Audit Guide revised for new EBP Audit Standards (SAS No. 136)
- AICPA staff independence interpretation of affiliate rules for Pooled Employer Plans (PEPs)
- AICPA EBP Product Manager Position
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2020 AICPA EBP Audit Guide revised for new EBP Audit Standards (SAS No. 136)
The AICPA recently issued the 2020 edition of the Audit and Accounting Guide, Employee Benefit Plans (the EBP Guide) that is updated for relevant authoritative financial reporting and audit guidance issued through August 1, 2020, including SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA and SAS Nos. 134-140, as applicable. Auditors that early implement SAS No. 136 for 2020 plan years audits performed in 2021 should use the 2020 edition of the EBP guide.
Click here to order the 2020 Audit and Accounting Guide, Employee Benefit Plans (through August 1, 2020).
Attendees at the November 9-11, 2020 AICPA Employee Benefit Plans Online Conference received a free eBook version.
The 2020 EBP Guide includes the new performance and reporting requirements of SAS No. 136 and certain enhancive updates to assist with implementing SAS No. 136 related to “substantially complete draft Form 5500,” “relevant plan provisions,” “reportable findings,” and ERISA Section 103(a)(3)(C) audit considerations, as referenced below:
- A draft of Form 5500 that is substantially complete includes the forms and schedules that could have a material effect, involving both qualitative and quantitative considerations, on the information in the financial statements and ERISA-required supplemental schedules (para. 2.47) and the related audit considerations (paras. 10.04-10.16).
- Provides a list of risks the auditor may consider when determining the relevant plan provisions. (paras. 3.18 – 3.23)
- Provides guidance on what may be considered when establishing reportable finding criteria (paras. 3.63 – 3.73) and the related audit considerations (paras. 10.41-10.45).
- Provides ERISA Section 103(a)(3)(C) audit considerations (paras. 2.22-2.46) and the related audit considerations (paras. 8.200-8.215).
Chapter 11 of the 2020 EBP Guide includes numerous illustrations for reporting on non-section 103(a)(3)(C) Audits and ERISA Section 103(a)(3)(C) audits.
The auditing guidance in the 2019 AICPA Audit and Accounting Guide, Employee Benefit Plans (as of January 1, 2019) continues to apply to audits of ERISA plan financial statements with periods ending before December 15, 2021 unless SAS Nos. 134-140 have been implemented early.
Click here for the 2019 Audit and Accounting Guide, Employee Benefit Plans (as of January 1, 2019).
AICPA staff independence interpretation of affiliate rules for Pooled Employer Plans (PEPs)
The SECURE Act allows for a new plan structure known as a pooled employer plan (PEP), a type of 401(k) multiple employer plan in which unrelated employers may participate. A PEP is established by a “pooled plan provider” (PPP). Plans that satisfy the PEP requirements are characterized as open multiple employer plans and are treated as a single plan for purposes of satisfying the requirements of ERISA. The PPP is responsible for the fiduciary and administrative duties related to the PEP. Each participating employer of a PEP is treated as the plan sponsor with respect to the portion of the plan attributable to employees of such employer (or beneficiaries of such employees).
The Department of Labor (DOL) estimates that over 3,200 PEPs may be created by recordkeepers and administrators of existing defined contribution plans, registered investment advisors, professional employer organizations (PEOs), chambers of commerce, certain insurance companies, and large broker dealers. Unless the PEP fits within the audit exemption rules (no more than 1,000 participants and no employer with more than 100), then the PEP is subject to an audit.
PPPs are required to register with the DOL using a new form–EBSA Form PR (Pooled Plan Provider Registration) and may begin operating on January 1, 2021. Although these plans will not come under audit until 2022, clients and auditors may have questions regarding engagement acceptance and independence. The AICPA Professional Ethics staff updated the Frequently Asked Questions: Application of the independence rules to affiliates of employee benefit plans concluding that a PPP is an affiliate of a PEP (and vice-versa). Participating employers would not be considered an affiliate of the PEP. However, if a firm auditing the PEP is providing non-attest services to a participating employer, the firm would need to consider the threats and safeguards to independence under the AICPA Conceptual Framework for Independence.
Click here for the AICPA Professional Ethics staff Frequently Asked Questions: Application of the independence rules to affiliates of employee benefit plans (as of November 2020).
AICPA EBP Product Manager Position
The AICPA Professional Development team is seeking to hire a Product Management & Development Manager for emplyee benefit plan content. The individual will be responsible for developing content (most notably the EBP Audit & Accounting Guide) to serve public accountants’/management accountants’ and other engaged professionals competency development needs; understanding member needs and proposing new products and product enhancements to enhance member value; and serving as a lead contributor as well as a collaborative leader to manage internal and external content developers to develop high quality and technically accurate content. The individual should have solid knowledge of accounting and auditing standards, ERISA and DOL reporting requirements, and EBP auditing. In addition, the individual should have strong project management, organizational, written/oral communication and presentation, decision-making, problem-solving, and conflict resolution skills; and the ability to manage multiple projects simultaneously. Candidates should have current CPA license with a minimum of 5-7 years' experience.
The individual will be based in the Durham, NC office and will be able to telecommute remotely from most locations in the US subject to the AICPA telecommuting policy. The AICPA has a work environment that offers work/life balance and is committed to diversity and inclusion.
Interested individuals can email Jennifer Hackim at Jennifer.Hackim@aicpa-cima.com for more information about the position.
Sincerely,
AICPA Employee Benefit Plans Audit Quality Center |
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