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PPC's Practice Aids: Audits of 403(b) Plans

PPC's Practice Aids: Audits of 403(b) Plans

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First time audits of 403(b) plans may be tricky. PPC's Practice Aids™ -- Audits of 403(b) Plans will help you avoid audit mistakes! Beginning with the 2009 plan years, the financial statements of many 403(b) plans will be required to be audited. Virtually none of these plans have ever been audited. While 403(b) plans are similar in many respects to 401(k) plans, there are many differences that will make auditing 403(b) plans challenging.

These Practice Aids were developed to provide auditors with the tools they need to meet the expected demand for 403(b) plan audits.

It is NOT too early to start working on 403(b) plan audits. Auditors may choose to begin these engagements this summer for the following reasons:

  • The records of many 403(b) plans are expected to be difficult to obtain and audit. According to the Department of Labor, “Despite the existing recordkeeping requirements, the Department recognizes that auditors may face difficulties in providing an unqualified opinion in their initial audits of Code section 403(b) plans.”
  • Comparative statement of net assets available for benefits must be presented. Plan sponsors may ask auditors to compile, review, or audit the prior year balances and those procedures may be performed during 2009.
  • Recent DOL inspections have discovered numerous instances of operational deficiencies in 403(b) plans. Based on the PPC's Practice Aids format used by thousands of firms, these practice aids, with extensive practical considerations, will guide you through the audit of a 403(b) plan:
    • Checklists
    • Confirmation letters
    • Firm policies
    • Initial audit procedures
    • Compilation procedures
    • Audit programs designed specifically for full scope and DOL limited-scope audits
    • Introductory material, including illustrative current year auditor's reports and compilation reports for the prior year statement of net assets

To make using these Practice Aids as efficient as possible, they are based on the practice aids included in PPC's Guide to Audits of Employee Benefit Plans. However, numerous changes have been made to address the specific issues involved in auditing 403(b) plans. We've tailored these Practice Aids for the unique aspects of auditing 403(b) plans, saving you time on every engagement. Our practical “how-to” engagement process includes extensive practical considerations to help you perform these engagements in a cost effective manner. Links to related accounting and auditing guidance on Checkpoint are also included.