As reported in our News Flash 17-4, and in response to a request made by the Department of Labor (DOL), the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) is revisiting the reporting model for audits of employee benefit plans. DOL staff joined the AICPA’s taskforce to develop ways to improve the quality of plan audits by enhancing the auditor’s report.
In an Exposure Draft issued April 20, 2017, the AICPA proposed its revisions and originally asked for comments and feedback by August 21, 2017. However, this date has since been extended to September 29, 2017.
In our comment letter to the AICPA, Legacy Professionals LLP urged the Auditing Standards Board to reconsider the report on findings because we believe the proposed model will not only fail to achieve the desired consistency in audit quality, but would also cause significant unintended consequences. We are concerned that the publicly available findings may become inflated as to their severity and magnitude, and foresee a rise in audit and legal fees, an additional burden to already underfunded plans.
While we welcome proposals that improve the quality of employee benefit plan audits, we are not hopeful that this objective can be achieved through revisions to the audit reporting model. In our comment letter, we appealed to the AICPA to strengthen continuing professional education and to enhance oversight of the poor quality auditors, as we feel these initiatives are more likely to strengthen and improve quality.
We strongly urge you to communicate your own concerns to the AICPA and would be happy to assist you in that process. For a copy of Legacy’s comment letter, please contact us at info@legacycpas.com. Click here to read the AICPA Exposure Draft.
This issue was edited by Eric Wallin, CPA, Partner. Eric can be reached at ewallin@legacycpas.com.