CariAnn J. Todd, CPA, is the Director of the Employee Benefit Plan Audit Group for BeachFleischman PC. She recently authored an article for the Journal of Pension Benefits that discusses how CPAs are addressing audit quality as well as some of the challenges in the process.
As a CPA, I am fortunate to be in a profession that, with the exception of the Enron and Arthur Andersen debacles in 2001 and a recent award show envelope mix-up, rarely makes the national news. While it did not make the Today Show when the Employee Benefits Security Administration (EBSA) released its study of audit quality in 2015, it made headlines in many of the most popular business publications. As a long-time auditor of employee benefit plans, it felt like Matt Lauer was knocking on our door.
The EBSA study revealed that 61 percent of audits complied with auditing standards or had minor deficiencies; however, 39 percent had one or more major deficiencies. While batting .610 would score us a 10-year, nine-figure contract in major league baseball, it is a number that is on the verge of embarrassing for our profession.
CPAs have long been self-governed and prided ourselves in doing a great job of keeping each other in line. The EBSA study revealed that in the area of auditing employee benefit plans, we have somehow missed the mark. The American Institute of Certified Public Accountants (AICPA) issued a six-point plan in May 2015 that addresses audit quality for all types of audits, not just employee benefit plans. The plan, which is available to the public on the AICPA website, starts in the prelicensure phase, then touches on all aspects of self-governance: education, peer review, monitoring, ethics enforcement, and clarified auditing standards.
This article was first published by Wolters Kluwer in the Journal of Pension Benefits, Autumn 2017, Vol. 24, No. 2.
If you have any questions regarding this article or other issues related to your employee benefit plan, please contact your client service representative at BeachFleischman, or contact CariAnn Todd, the Director of our Employee Benefit Plan Audit group via email, firstname.lastname@example.org or directly at (682)203-6556.