SAS 136: What It Means for Plan Sponsors

To assist plan sponsors, the AICPA employee benefit plan audit quality center has a great tool to assist plan management in assessing whether the conditions for electing an ERISA section 103(a)(3)(C) audit have been met. The engagement letter will include language for plan management to agree to certain items, such as prior to dating the audit report plan management will provide a draft of the form 5500 that is substantially complete. A copy of Schedule H is not enough. The form 5500 includes all applicable schedules, such A, C, D, R and SB. In addition, the engagement letter will include plan management's acknowledgement of its responsibilities to maintain a current plan instrument, including all plan amendments, as well as administering the plan and determining that the plans transactions that are presented and disclosed in the financial statements are in conformity with the plans provisions, including maintaining sufficient participant records to determine the benefit due or which may become due to participants.

Another new terminology includes reportable findings. The standard requires auditors to communicate in writing to those charged with governance, reportable findings from the audit procedures performed relating to plan provisions. Reportable findings can be an identified instance of non-compliance or suspected non-compliance with laws or regulations, a finding arising from the audit that we believe is significant and relevant to those charged with governance, or an indication of deficiencies in internal control identified during the audit. It is important to note that the standard prohibits us from issuing a written communication stating that no reportable findings were identified during the audit.

I hope that you found this helpful, and we look forward to performing the audits of your plans this year.

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