The American Institute of CPAs has extended the comment period for its Proposed Statement on Auditing Standards (SAS) Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA from Aug. 21, 2017 until Sept. 29, 2017. The extension will give people an extra 150 days to write and submit comments.
The AICPA proposed changes in its standards for audits of employee benefit plans in April after the Department of Labor issued a critical report about the quality of the audits (see AICPA proposes standard for auditing employee benefit plans).
The U.S. Department of Labor issued a report in 2015 criticizing the quality of employee benefit plan audits by CPAs, and the AICPA has pledged to fix the problem (see AICPA Pushes for Auditing and Assurance Changes). The Labor Department’s Employee Benefits Security Administration found serious deficiencies in 39 percent of the audits of employee benefit plans that it examined. In response, the AICPA developed a six-point plan to improve audits, and last year, the AICPA launched a certification program to better train CPAs on auditing employee benefit plans as part of its Enhancing Audit Quality initiative.
In April, the AICPA’s Auditing Standards Board issued an exposure draft of a Proposed Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, specific to audits of financial statements of employee benefit plans that are subject to the Employee Retirement Income Security Act of 1974, or ERISA for short.
The proposed standard addresses the auditor’s responsibilities to form an opinion and report on the financial statements of ERISA plan financial statements, along with the form and content of that report, including reporting on specific plan provisions regarding the ERISA plan financial statements and reporting when management places a limitation on the scope of the audit in accordance with section 103(a)(3)(C) of ERISA.
For audits of ERISA plan financial statements only, the proposed standard would apply in place of AU-C section 700, Forming an Opinion and Reporting on Financial Statements (AICPA, Professional Standards), and paragraph .09 of AU-C section 725, Supplementary Information in Relation to the Financial Statements as a Whole (AICPA, Professional Standards).
The proposed SAS also would amend several other AU-C sections in the AICPA's Professional Standards. The proposed standard would take effect for audits of financial statements for periods ending on or after Dec. 15, 2018.
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