Most employee benefit plans with 100 or more participants are required to have an annual audit under the Employee Retirement Income Security Act (ERISA).  While employers tend to view these audits skeptically – after all, they cost money, keep your staff tied up with non-essential tasks, and don’t directly add to the bottomline – they can actually be an excellent opportunity to do some fine-tuning that will help your business run more smoothly. 

ERISA audits are performed by private CPA firms, not by government employees.  Recent changes in auditing standards in the U.S.require auditors to have an in-depth understanding of a client’s business, business environment, operation, and internal controls.  This means that as auditors work with a variety of companies within an industry, they develop a unique understanding of industry practices and benchmarks. 

Business owners can take advantage of this expertise.  Ask the auditor what he or she would do to improve your accounting practices, payroll system, and internal controls.  Implementing these recommendations will not only make next year’s audit go that much faster, it will also enable you to have a more accurate picture of your company’s financial health throughout the year.

For more information on ERISA audits, please contact us.