Things You Need to Know About Employee Benefits Plan Audit
Every company or business organizations that provide employee benefits for more than 100 employees requires an employee benefit plan audit by a certified accounting firm. The objective of the audit is to ensure that the company meets the fiduciary responsibility as required by the law. Even so, you should not settle for the first CPA firm that comes your way since it is a complex problem and there are many guidelines that should be followed. The auditors should carry out the audit in accordance with the guidelines set by the Internal Revenue Code (IRC). The primary purpose of an employee benefit plan audit is to identify the areas that the company should improve and manage the benefits well. Some of the vital aspects that the CPA firm will look into when carrying out the employee benefit plan audit include 401(k)s, pension plans, savings plans, and union representation among others.
The number of companies that perfect an EBP audit is low in as much as it is legally required and beneficial in several ways. Every company should carry out an EBP audit every year to avoid the penalties. Therefore, one of the reasons why you should consider an EBP audit is to avoid penalties and sanctions that can be imposed by the Department of Labor. In addition to the compliance reasons, you should consider EBP audit as a means of protecting your business against financial fraud and abuse. The business assets will be safeguarded from both internal errors and employee deception.
The EBP audit is a credible source of information regarding the areas that you can change in your plans to save on money. Hiring a CPA firm for the EBP audit can be expensive, but you can protect your business from unnecessary expenditure in the long run. The information that is contained in the report can help you make better decisions regarding the existing employee benefits plan. Management of workforce and resources at the disposal of the company will be easy if you analyze and understand the audit report.
Following the numerous benefits, businesses should consider EBP audit as an opportunity to improve on financial management. Ensure that you hire a CPA firm that has a team that is familiar with the IRC guidelines so that you can realize the associated benefits. Click here to learn some of the factors that you should consider when choosing a suitable CPA firm for employee benefits plan audit.
Before you hire an independent firm to carry out the audit, you should learn some of the vital areas that it will cover. Using the information provided in this article, you can make better decisions regarding an EBP audit as it is beneficial in several ways.
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