By Eric Woodruff, CPA, CCIFP
Partner, Director of Audit & Assurance Services
Email Eric
Summer is an ideal time for a 401(k) audit. First, summer months tend to be a better time for CPA firms to take on these audits, as the hustle and bustle of tax filing season is behind us. Second, for 401(k) plans with calendar year ends, Form 5500 and the auditor’s report are usually due at the end of July, unless an extension is filed.
Need an audit? We’re here to help!
As an employer, a common deficiency in employee benefit plans that you should keep in mind is related to the timely remittance of employee contributions. When an employee withholds funds from their paycheck and designates them for their 401(k) account, it is the responsibility of the employer to remit those funds in a timely manner. Holding those funds for a week is basically the same as the employer taking an interest-free loan from their employees.
The U.S. Department of Labor has been clear in their guidance that if payroll taxes can be remitted in the matter of a few days, they expect 401(k) contributions to be remitted in the same timeframe.
Sponsel CPA Group is a member of the American Institute of CPAs (AICPA) Employee Benefit Plan Audit Quality Center and is qualified to perform audits of most 401(k) plans. We are also available to help management teams prepare for an outside audit of their plan. And we have a team that can provide third-party administration services for your benefit plan throughout the year, should you wish to outsource this function entirely.
Benefits of working with our team include:
- Experienced auditors with specific knowledge of your industry/profession
- Stable audit team that delivers a consistently smooth audit process for your company
- Improved business decisions based on reliable data
- Gaining competitive analysis through key performance indicators (KPI)
- Ensuring reliability and credibility of financial reporting and analysis
- Ensuring compliance with industry regulations and standards
- Providing accountability to your Board of Directors and other stakeholders
If we can assist you further with your 401(k) plan, please contact Eric Woodruff at (317) 613-7850 or email Eric.