The Real Purpose of Your 401(k) Audit

Mike BedelBy Mike Bedel, CPA, MBA, CGMA
Partner, Director of Audit & Assurance Services

If your company’s 401(k) plan has more than 100 eligible participants, it is large enough that the U.S. Department of Labor requires an audit of your plan. This audit must be attached to your annual 5500 filing, but is often viewed as an unnecessary compliance cost by the 401(k) plan sponsor.

The true purpose, however, for the required audit of this employee benefit plan is to protect various stakeholders in the plan, especially the plan participants.

Many employees rely on their 401(k) plan to save for retirement. Many expert resources such as Forbes describe it as “the single best wealth accumulation vehicle available to the vast majority of Americans.”

However, most employees are not well-versed in how their 401(k) plan operates. As a result, they may not be aware if their personal accounts are not being appropriately credited for their contributions.

By taking the audit process seriously, the plan sponsor communicates that they understand the value their employees place on the wealth they’ve accumulated in their individual 401(k) accounts. When a plan sponsor makes decisions that minimize the role of the audit, they are perceived by their employees as not valuing the hard-earned money set aside over the years – or even as putting their own interests ahead of the employees’.

The Department of Labor and the Internal Revenue Service continue to emphasize the importance of fiduciary responsibility to those involved in the management of the retirement plans. They also stress the importance of a thorough and complete audit process as a significant means of oversight on the plan’s operations.

Additionally, the audit provides some protection to a fiduciary of the plan who is taking their role seriously. It is a way for them to act upon their responsibilities to protect the plan. And it serves to identify if the plan is operating outside of compliance with regulations from the DOL or IRS.

Sponsel CPA Group performs audits of defined contribution employee benefit plans, such as 401(k) plans. We take this responsibility very seriously and value the role we play in protecting the interest of all stakeholders for the plans we audit.

If you have questions about audits of 401(k) plans, please contact Mike Bedel at (317) 613-7852 or email mbedel@sponselcpagroup.com.

 

Do I Need a Personal Coach?

Lisa PurichiaBy Lisa Purichia
Partner, Director of Entrepreneurial Services

If you’re the owner of a business, you probably have experienced times where it felt like the people who work for you expect you to know everything about every single aspect of the operation. But everyone has gaps in their knowledge and experience. The best managers not only recognize their shortcomings, they take steps to address them and fill in those holes.

It doesn’t matter how you came into ownership of your company – whether it’s a family-owned enterprise where you watched previous generations run it, you bought into the business or started it yourself and watched it grow. And no matter what fancy title you wear – President, CEO, etc. – everyone has areas of leadership they need to work on.

Once you’ve acknowledged the need to improve and have identified the areas where you need to be more proficient, the question becomes one of how to go about attaining those skills. Some people consume books on leadership development, or even biographies of noted business leaders.

One method growing in popularity is to invest in a personal coach. This is an expert you contract with, generally on your own time and your own dime, who gives you confidential advice and counsel on how to improve yourself as a professional. They point you to educational opportunities and help you keep on track with timelines, goals and milestones.

In short, a personal coach can help you formulate a path to individual excellence.

This is a route that more and more people are taking, from partners at the biggest law firms to middle managers in smaller enterprises. They’re seeking out an individual professional resource to make themselves better, and in turn make their businesses more successful.

A personal coach, also known as an executive coach, is someone outside of the business who can offer a fresh perspective and assess your personal needs and resources. This can extend beyond purely company-related concerns to tangential areas like your personal and social life.

Though the choice of scope is yours, oftentimes a deficiency you’re experiencing – such as trouble communicating your needs — can bleed through all aspects of your life. An outsider’s perspective can help you see where imbalances lie in your personal and professional endeavors.

As a leader, it can be easy to become distracted and unable to see if we’re doing well or not, because we’re in the middle of a swamp known as the day-to-day operations of an organization. It may well be that you’re doing a great job, but feel overwhelmed and lacking the feeling of success. It can also be there are areas where you’re falling down on the job, and are failing to acknowledge them.

Most assessments by a personal coach will show that the executive is doing pretty well overall, but identify specific areas that need to improve. I know of several business colleagues who have utilized a personal coach, and they say it really helped them be more effective at what they want to do.

A personal coach may not be for everyone. But if you find yourself struggling to meet goals that you have set for yourself, or feel overcome by the daily grind of leadership, consider the services of a personal/executive coach to help yourself improve on an overall basis. The disciplined approach to a personal improvement plan, facilitated by a personal coach, may let you realize the passion and fulfillment you thought had disappeared!

Your team members may think you know it all, but any good business owner/manager realizes it isn’t so. It takes a humble person to admit their faults, and it takes dedication to develop a plan to improve your skillset. If you’re one of those people who strives for ways to improve themselves, a personal coach can be a wise investment in pursuit of your personal happiness.

 

If you have any questions or comments, please contact Lisa Purichia at (317) 608-6693 or email lpurichia@sponselcpagroup.com.

Employee Spotlight — Brandon Hoge

Brandon_Hoge_smallAs a Staff accountant in the Audit & Assurance Services Department, works on audits, reviews, compilations and agreed-upon procedures for clients, primarily closely-held companies in the construction and manufacturing industries, as well as not-for-profits. He joined the firm in 2015 after graduating from IUPUI with a master’s degree in accounting, after previously receiving a bachelor’s degree in financial planning from Purdue University. He also served an internship at Sponsel CPA Group before being brought in as a permanent member of the team.

Brandon has already passed the exam for CPA licensure, which he will receive later this year after earning the requisite two years of public accounting experience. He is a member of the Indiana CPA Society.

In his spare time, Brandon enjoys exercising and playing sports, listening to music and watching movies and television, and rooting for his favorite teams: Purdue, the Indianapolis Colts and Chicago Cubs.

Cybersecurity: Beware of Sophisticated Phishing Attacks

Chris EdwardsBy Chris Edwards
Manager, IT Services

Phishing attacks are nothing new, but lately they’ve reached such a level of sophistication that they have even fooled information technology experts.

Phishing, which is mostly encountered via email, tricks people into clicking on a link that appears legitimate in order to steal confidential data – or even your identity.

How bad is the problem? As many as 100,000 new phishing attacks are reported every month, according to the Anti-Phishing Working Group. The FBI even believes a phishing email is how Russian hackers infiltrated the Democratic National Committee servers, according to Wired.

The most common form of phishing involves convincing you to login to an existing account you already have, such as your bank or email. It might say something like, “You need to update your account” or “Log in to see your benefits.” This is known as the “worm,” i.e. the bait that catches your eye and gets you to strike.

(In phishing, you are the fish!)

Clicking on their link takes you not to the actual website, but a dummy site the phishers have set up to mimic the real one. It can even have the same design and logos of the one you’re used to. Once you put in your username and password, they’ve caught you.

Lately phishing scams have been coming through Dropbox or other popular file-sharing services. We’ve even encountered them on lesser-known paid services like Sharefile.

Earlier in May, there were widespread media reports of a phishing scam that prompted receivers to open a Google Docs file. Since this is such a commonplace activity, many people clicked on the blue “Open in Docs” button without thinking. It would then take them to a site where they were asked to login to their Google account.

Unfortunately, there really isn’t a strong defense against phishing other than warning your team to be vigilant. Spam filters will catch some of them, but since phishers change email addresses so often, many will get through to your inbox.

The simplest defense is to be wary. If something seems wrong about a message, it probably is counterfeit. You may receive an email from someone you know, asking you to open document. But if you weren’t expecting a file from them, be cautious.

This is a good example of using existing technology to bolster another one. If you receive an email from a colleague you suspect is bogus, pick up the phone and ask them if they sent it.

Another option is to use a two-factor authentication when logging into a secure site. This can be an automated phone call or text message to your phone in addition to the login you use on your computer. It’s much more difficult from phishers to infiltrate your identity this way.

Also, be suspicious if a website asks you to login to an account that you’re already automatically logged into when your computer boots up, such as the Google account you may use for Gmail. Take a look at the URL web address at the top of your browser. Or, you can mouse over a web link without clinking on it to obtain a preview of where it will take you.

If the web URL looks strange or doesn’t conform to the normal address you’re used to, that’s a big red flag. Talk to your company’s in-house IT professionals, or whoever your vendor is, if you’re unsure.

They key is not to clink blindly on every web link that shows up in your email inbox or on websites to which you’re directed. The best way to avoid getting phished is to not take the bait.

If you need to consult with an expert about protecting your company’s information systems, please call Chris Edwards at (317) 613-7855 or email CEdwards@sponselcpagroup.com.

CPA Celebration Honorees

INCPAS honors

Tom Sponsel, Emily Campbell and Ryan Hodell (l-r) were honored at the 2017 INCPAS CPA Celebration on May 12.

The Indiana CPA Society (INCPAS) held their annual CPA Celebration on May 12th. Sponsel CPA Group had several team members recognized for their accomplishments.

Emily Campbell and Ryan Hodell were recognized for successfully passing the rigorous CPA Examination!! Tom Sponsel was recognized for reaching his 40th anniversary of INCPAS membership.

We would also like to congratulate Brandon Hoge, who has also successfully passed the CPA Exam. He will be recognized at next year’s CPA Celebration after attaining two years of public accounting experience.

We are very proud of all our team members, but want to congratulate those that were recognized at this annual INCPAS event!

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