Things You Need to Know About Employee Benefits Plan Audit
It is required by the law for all the company that offer employee benefits to more than 100 employees to hire a certified CPA firm for employee benefits plan audit. The objective of the audit is to ensure that the company meets the fiduciary responsibility as required by the law. Nonetheless, not all the CPA firms are capable of performing an accurate employee benefit plan audit as it is a complex process that involves many guidelines and protocols. The auditors should carry out the audit in accordance with the guidelines set by the Internal Revenue Code (IRC). Through the audit, a business can identify the areas that it can improve the performance regarding employee benefits. 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.
Most companies fail to conduct an employee benefit plan audit in as much as it is required by the law since they do not understand the benefits. As a manager, you should have the audit if you want to avoid serious consequences and penalties put in place by the Department of Labor. If you are looking for a reason to have an EBP audit, you should look at the possible consequences and penalties that your business is likely to face. Additionally, an EBP audit will help protect your business from fraud. The business assets will be safe since issues such as internal errors and employee deception will be eliminated.
Using the EBP audit report, you can identify the potential areas that will help you save money and streamline employee benefits. 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. Even so, you should find the right CPA firm that has a team of well-trained and experienced accountants that will follow the IRC guidelines. In this website, you will discover some of the things that you should look into when choosing a suitable CPA firm to audit your business or company.
Figure out all the areas that should be covered during the audit before hiring a certified accounting firm. 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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