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Covers GAAP, GAAS, ERISA, and DOL rules
The information and tools you need to conduct effective and efficient audits and to ensure that your audits don't appear in DOL audit failure statistics.
The Department of Labor and your peer review team are extremely interested in how well you perform your EBP audits, so you should be too! Whether you audit defined benefit, defined contribution, or health and welfare benefit plans, you need the most comprehensive guidance, audit programs, and other practice aids found in this Guide, including guidance on:
Performing full-scope and DOL limited-scope audits.
Preparing supplemental schedules in conformity with DOL requirements.
Making all of the required plan disclosures.
Modifying your auditor's report as necessary.
The following are some of the important new features in the 2008 edition:
Clarified and Streamlined Audit Process and Tools. Customer feedback indicates that there is sometimes confusion over what practice aids are considered necessary in an audit engagement. We have added a tool that distinguishes between practice aids that are generally required in an audit of an employee benefit plan, are only used if the client presents a specific situation, or are considered a supplemental practice aid. Also, we streamlined the planning process by combining two of the 2008 forms, EBP-CX-3.1 and EBP-CX-6.1, into a new form.
Sample SFAS No. 157, Fair Value Measurements, Disclosures. SFAS No. 157 is effective for most 2008 plan years and significant new disclosures are now required. We have added illustrative fair value measurement disclosures to many of the sample financial statements included in the Guide to make preparing or auditing those disclosures easier.
Revised Guidance and Tools for Communicating Significant Deficiencies in Internal Control. In October 2008, the AICPA issued SAS No. 115, Communicating Internal Control Matters Identified in an Audit, which supersedes SAS No. 112 for audits for periods ending on or after December 15, 2009, with early implementation permitted. Among other things, the new SAS revises the definitions of “significant deficiencies" and “material weaknesses" in internal control. We've updated your guidance and tools for the new SAS, including adding new worksheets and example communications.
Communications with Those Charged with Governance. SAS No. 114, The Auditor's Communication with Those Charged with Governance, requires communication of the auditor's responsibilities under GAAS and the planned scope and timing of the audit to those charged with governance. These matters may be communicated in the engagement letter if that letter is provided to those charged with governance. However, the auditor may use a separate communication, which also provides an opportunity for additional interaction with the plan's governing body. We've added an illustrative letter that may be used to communicate separately with those charged with governance during audit planning.
FASB Accounting Standards Codification. One of the biggest changes in the way generally accepted accounting principles (GAAP) is delivered and accessed will be the FASB's new Accounting Standards Codification, which is currently expected to be final in July 2009. The Codification brings all authoritative GAAP pronouncements together in a single source that will replace the existing GAAP pronouncements. To help you become familiar with the Codification, we have added further details of the project and references to the verification version of the Codification. Plus, for those customers that purchase the Checkpoint version of the Guide and the FASB Reference Materials, when the Codification becomes effective, you'll have the tools you need to link directly from the summarized guidance in your Guide to the related authoritative literature.
Updated for New Standards and Other Guidance. Audit programs, checklists, letters, other practice aids, and discussions throughout the Guide have been updated for recently issued standards and to reflect the requirements and guidance in the 2008 versions of the Form 5500 and the AICPA Audit and Accounting Guide, Employee Benefit Plans, to make sure you apply the latest guidance in your audits.
APPENDIX 3B-1: Defined Benefit Retirement (Pension) Plans
APPENDIX 3C: Illustrative Financial Statements--Health and Welfare Plans
APPENDIX 3C-1: Health and Welfare Benefit Plan--Uninsured Multiemployer Plan
APPENDIX 3C-2: Health and Welfare Benefit Plan--Insured Single-employer Plan
APPENDIX 3C-3: Welfare Benefit Plan--Uninsured Single-employer with a 401(h) Account
APPENDIX 3C-4: Health and Welfare Benefit Plan--Unemployment (Postemployment) Benefit
APPENDIX 3C-5: Health and Welfare Benefit Plan--Vacation Benefit
CHAPTER 4: PRE-ENGAGEMENT ACTIVITIES AND AUDIT PLANNING
400 INTRODUCTION AND AUTHORITATIVE LITERATURE
Authoritative Literature
Pre-engagement Activities.
Preliminary Planning
401 ENGAGEMENT ACCEPTANCE AND CONTINUANCE
Risk-based Perspective
Ability to Accept the Engagement
Independence
Nonattest Services.
Independence--ERISA and DOL Rules.
Expertise in the Employee Benefit Plan Area.
Ability to Meet the Engagement's Time Requirements and Deadlines.
Ability to Meet ERISA Audit Requirements.
Management Integrity
Outsourcing
Scope of the Audit
DOL Limited-scope Audit.
Nature of the Plan.
Type of Trust Arrangement.
Third-party Service Organizations.
Type of Investments.
Types of Contracts with Insurance Companies.
Need to Test Participant Data.
Type of Financial Statements--OCBOA Statements.
Type of Financial Statements--Beginning-of-year Benefit Information Date.
Type of Financial Statements--Trust Fund.
Type of Report on Required Supplemental Schedules.
Preparation of Form 5500.
Need for SEC Filing.
Initial Audit.
402 DOCUMENTING THE ENGAGEMENT ACCEPTANCE OR RETENTION DECISION
Annual Evaluation for Continuing Engagement
403 ESTABLISHING THE TERMS OF THE ENGAGEMENT
Documenting the Terms of the Engagement
404 AUDIT PLANNING
Objectives of Audit Planning
Risk Assessment Process
Procedures Performed.
Understanding Obtained.
Decisions and Judgments Made.
Summary of Risk Assessment Process.
The Sequence of Audit Planning
Types of Risk Assessment Procedures
Nature, Timing, and Extent--General Considerations.
Gathering Other Information Needed to Identify Fraud Risks.
Using the Results of Risk Assessment Procedures Performed in Prior Periods.
Inquiries of Plan Management and Others
Matters and Parties of Inquiry.
Fraud-related Inquiries.
Documentation.
Preliminary Analytical Procedures
Observation and Inspection
Documentation.
Discussion among the Engagement Team
Matters to be Discussed.
Effect on Significant Audit Areas.
Who Should Attend the Discussion?
When Should the Discussion Occur?
Other Matters That May Be Discussed.
Documentation of the Discussion.
405 UNDERSTANDING THE PLAN AND ITS ENVIRONMENT
Components of the Understanding
Documentation.
Purpose of This Section.
The Plan and Industry, Regulatory, and Other External Factors
AICPA Audit Risk Alert.
Review of Laws and Regulations.
Inquiry of Plan Management.
Review of Plan Documents.
Pending Amendments.
Plan Defects.
Review of Financial Statements and Form 5500.
The Health Insurance Portability and Accountability Act.
Objectives, Strategies, and Related Business Risks
Measurement and Review of the Plan's Financial Performance
Selection and Application of Accounting Policies
Fraud Risk Factors
Examples of Fraud Risk Factors.
406 THE UNDERSTANDING OF INTERNAL CONTROL
Components of Internal Control
Nature of the Auditor's Understanding
Extent of the Auditor's Understanding
Determining the Extent of the Understanding.
Using the Results of the Understanding of Internal Control
Effect of Information Technology (IT) on Internal Control
Benefits and Risks of IT.
Considering Whether Specialized IT Skills Are Needed to Understand Internal Control.
Documentation
Control Environment
Risk Assessment
Information and Communication
Financial Reporting System.
Communication.
Monitoring
Consideration of Internal Audit Function.
Control Activities
Understanding Controls Related to Significant Risks
Documentation
Internal Controls, Service Organizations, and Audit Strategy
Obtaining an Understanding of Internal Control at the Service Organization.
Assessing Control Risk.
Types of Service Auditor's SAS 70 Reports.
407 AUDIT PLANNING DECISIONS AND JUDGMENTS
Determining Materiality at the Financial Statement Level
Quantifying Planning Materiality.
Desirability of a Single Benchmark.
Recommended Benchmark.
Selecting a Percentage.
Determining Materiality for Particular Items of Lesser Amounts
Determining Tolerable Misstatement
Assessing Risks of Material Misstatement at the Financial Statement Level
The Audit Risk Model
Risk of Material Misstatement
Relevant Assertions
Assessing the Risk of Material Misstatement at the Relevant Assertion Level
Determining Significant Audit Areas.
Significant Risks in an Employee Benefit Plan Audit
Accounting Estimates.
Parties in Interest and Prohibited Transactions.
Documenting Audit Risk Considerations.
Establishing an Overall Audit Strategy
Communicating with Those Charged with Governance.
Documentation.
408 USE OF A SPECIALIST
Planning Considerations When Specialists Are Not Used
409 TIMING AND COORDINATION CONSIDERATIONS
Audit of Plan Sponsor
Public Company Plan Sponsor.
Service Organization Report
Financial Statements of Trustees or Insurance Companies
Multiemployer Plans
Reading Form 5500
410 AUDIT SAMPLING
Determining Audit Sampling Applications
Likelihood of Using Audit Sampling by Audit Area.
Sampling Approaches and Methods
Balance Testing.
Transaction Testing.
Designing Tests of Transactions Using Audit Sampling
Planning.
Sample Selection.
Evaluation.
Documentation of Transaction Testing
411 DETAILED AUDIT PLANS AND WORKPAPERS--ORGANIZATION AND STRUCTURE
Determining the Audit Approach
Limited Procedures Approach.
Basic and Extended Approaches.
Documenting the Response.
Audit Documentation (Workpapers)
Support for Auditor's Report.
Other Purposes of Workpapers.
Basic Requirements for Content.
Documenting Specific Items Tested and Other Procedures.
Documenting the Identification of Preparer and Reviewer.
Documenting Significant Findings or Issues.
Documenting Revisions after the Date of the Auditor's Report.
Audit Documentation Recommendations.
Workpaper Indexing.
Workpaper Considerations for an ERISA Audit.
412 SPECIAL PLANNING CONSIDERATIONS IN INITIAL ENGAGEMENTS
Initial Audit of a Previously Unaudited Plan
Procedures to Test Opening Balances.
Financial Statement and Auditor's Report Implications.
Audit of a Previously Audited Plan
Audits of Plan Financial Statements Previously Audited (Reaudits)
Communications with the Predecessor Auditor.
Reliance on the Work of the Predecessor.
Effect on the Successor's Audit Report.
Providing Access to Workpapers in a Reaudit Situation.
413 ENGAGEMENT ADMINISTRATION FORMS AND AUDIT PROGRAMS
CHAPTER 5: SPECIAL AUDITING CONSIDERATIONS
500 INTRODUCTION AND AUTHORITATIVE LITERATURE
Authoritative Literature
501 CONTRIBUTIONS RECEIVED AND RECEIVABLE
Implications of ERISA Requirements for the Audit of Contributions
Auditing Procedures for Contributions
Analytical Procedures.
Vouching and Confirmation.
Noncash Contributions.
Rollover Contributions.
Defined Benefit Plan Contribution.
Defined Contribution Plan Contribution.
Multiemployer Plan Contribution.
Contribution Receivable from Employer
Allowance for Uncollectible Receivable.
502 INVESTMENTS
Factors That Influence the Audit of Investments
Physical Location of Investments and Records.
Type of Investment Administration and Trust Arrangement.
Limited-scope Audit.
Basic Auditing Procedures for Investments
Auditing Investment Existence.
Auditing Investment Activity.
Auditing Investment Income.
Auditing Investment Valuation.
Considering Liens and Pledges on Investments.
Considering Compliance with ERISA and Plan Provisions.
Auditing Investments Held in a Discretionary Trust
Auditing Investments in Common/Collective Trusts
Auditing Investments in Mutual Funds
Auditing Investments in Master Trusts
DOL Limited-scope Audits.
Auditing Investments in Omnibus Accounts
Auditing Other Investments
Real Estate.
Limited Partnerships.
Mortgages and Loan Investments, Including Participant Loans.
Nonpublicly-traded Stock and Employer Securities.
Derivatives.
Self-directed Investment Programs.
503 CONTRACTS WITH INSURANCE COMPANIES
Basic Auditing Procedures for All Types of Contracts
Auditing Contract Valuation.
Limited-scope Audit.
Additional Procedures for Deposit Administration (DA) Contracts
Additional Procedures for Immediate Participation Guarantee (IPG) Contracts
Additional Procedures for Guaranteed Investment Contracts (GIC)
Additional Procedures for Synthetic GICs
Additional Procedures for Separate-separate Accounts
Additional Procedures for Pooled Separate Accounts
504 PARTICIPANT DATA
Basic Auditing Procedures for Participant Data
Employee Contributions.
Withdrawals, Terminations, and Forfeitures.
Additional Procedures for Defined Benefit Retirement and Health and Welfare Plan Participant Data
Additional Procedures for Cash Balance Plans.
Additional Procedures for Defined Contribution Plan Participant Data
Additional Procedures for Multiemployer Plans
Procedures Performed by Other Auditors.
505 BENEFIT PAYMENTS
Audit Procedures
Termination of Benefit Payments.
Service Organizations.
ERISA and Tax Requirements
Locating Missing Participants.
Rollover Distributions
506 BENEFIT OBLIGATIONS
Defined Benefit Retirement Plan Obligations
Benefit Obligations for Defined Benefit Health and Welfare Plans
Auditing Insurance Premium Obligations.
Auditing Unpaid Claims Reported to Uninsured Plans.
Auditing Claims Incurred but Not Reported (IBNR) to Uninsured Plans.
Auditing the Obligation for Accumulated Eligibility Credits.
Auditing the Obligation for Postretirement Benefits.
Auditing the Obligation for Postemployment Benefits.
Liabilities for Benefits of Defined Contribution Health and Welfare Plans
507 OTHER ASSETS, LIABILITIES, AND OPERATING EXPENSES
Cash
Rebates Receivable
Operating Assets (Property and Equipment)
Accounts Payable (for Securities Purchased, Management Fees, and Operating Expenses)
Loans Payable
Operating (Administrative) Expenses
508 OTHER AUDIT CONSIDERATIONS
Analytical Procedures
Selecting Appropriate Analytical Procedures.
Examples of Analytical Procedures.
Evaluating the Results of Analytical Procedures.
When the Fluctuations from Expected Amounts Are Significant.
Limitations of Analytical Procedures.
Required Documentation.
Terminating Plans
Partial Terminations.
Changes in Service Organizations
Defined Contribution Plans.
CHAPTER 6: CONCLUDING THE AUDIT
600 INTRODUCTION
601 COMMITMENTS AND CONTINGENCIES
Audit Procedures
Plan Tax Status
Auditor's Responsibility for Plan Tax Status.
Audit Procedures for Plan Tax Status.
Legal Representation Letter
Content of the Letter.
Evaluating Lawyers' Responses.
Environmental Remediation Liabilities
Applicability to Employee Benefit Plans.
Audit Procedures.
Risks and Uncertainties
Certain Significant Estimates.
Current Vulnerability Resulting from Certain Concentrations.
602 SUBSEQUENT EVENTS REVIEW
Material Depreciation in Fair Value of Investments
Timing
603 RELATED PARTIES, PARTIES IN INTEREST, AND PROHIBITED TRANSACTIONS
Definitions
Detection Responsibility
Audit Procedures
Related Party Transactions and Fraud.
Disclosures
Related Parties.
Prohibited Transactions.
604 GOING CONCERN CONSIDERATIONS
Applicability of SAS No. 59
Applicability of SAS No. 59 to Terminating Plans.
Conditions and Events
Audit Procedures
Documentation Requirements
Practice Aids
605 MANAGEMENT REPRESENTATION LETTER
Content of the Letter
Modified Audit Reports.
Audit Adjustments
Materiality
Signatures and Date on the Letter
Periods Covered by the Letter
Illustrative Letter
606 CONSIDERING THE ACCUMULATED RESULTS OF AUDIT PROCEDURES
Reevaluating Risk Assessments
Evaluating the Existence of Fraud
Fraud Risk Assessment Is a Cumulative Process.
Required Procedures.
Evaluating Significant Unusual Transactions
Considering the Application of Significant Accounting Principles for Bias
Documentation Requirements
607 ANALYTICAL PROCEDURES
Purpose of Analytical Procedures
608 REVIEW OF WORKPAPERS
Tax Department Review
Timing of Review of Workpapers.
Review Checklists
Common Peer Review Findings
609 SUMMARIZATION AND EVALUATION
Categories for Evaluation
Audit Differences
Known and Likely Misstatements.
Communication of Misstatements to Management.
Evaluating Audit Differences
Trivial Misstatements.
Evaluating Estimates.
Different Levels for Different Amounts, Subtotals, or Totals.
Overall Evaluation.
Evaluating the Existence of Fraud
Documentation Requirements
Summary of Audit Differences.
Evaluation of Overall Materiality
610 DRAFTING THE FINANCIAL STATEMENTS, REQUIRED SUPPLEMENTAL SCHEDULES, AND AUDITOR'S REPORT
Financial Statements
Notes to the Financial Statements
Required Supplemental Schedules
Reporting Delinquent Participant Contributions.
Form 5500
Auditor's Responsibility for Other Information in Form 5500
Material Inconsistency.
Material Misstatement of Fact.
Auditor's Responsibility for Other Information in Electronic Sites
Auditor's Reports
611 CLIENT COMMUNICATIONS
Communicating Internal Control Related Matters under SAS No. 112
Identifying Control Deficiencies.
Evaluating Control Deficiencies.
Significant Deficiency.
Material Weakness.
Examples of Deficiencies.
Can the Auditor Draft the Financial Statements?
Aggregation of Deficiencies.
Mitigating Effects of Compensating Controls.
Redundant Controls.
Prudent Official Test.
SAS No. 112 Control Deficiency Evaluation and Aggregation Worksheet.
Control Deficiency Comment and Management Point Development Worksheet.
Communication Requirements.
Reporting When There Are No Significant Deficiencies.
Reporting When There Are No Material Weaknesses.
Illustrative Communications.
Communicating Internal Control Related Matters under SAS No. 115
Definitions.
Examples of Deficiencies.
Identifying Control Deficiencies.
Evaluating Control Deficiencies.
Aggregation of Deficiencies.
Mitigating Effects of Compensating Controls.
Qualitative Considerations.
Prudent Official Test.
Control Deficiency Evaluation and Aggregation Worksheet.
Control Deficiency Comment and Management Point Development Worksheet.
Can the Auditor Draft the Financial Statements?
Communication Requirements.
Reporting When There Are No Significant Deficiencies.
Reporting When There Are No Material Weaknesses.
Illustrative Communications.
Communication with Those Charged With Governance
Responsibilities Under GAAS.
Planned Scope and Timing of Audit.
Significant Audit Findings.
Documentation of Communications.
Fraud and Illegal Acts
Communication about Fraud.
Communication about the Plan's Ability to Continue as a Going Concern
612 AUDIT PROGRAM OR PLAN
CHAPTER 7: AUDITOR'S REPORTS
700 INTRODUCTION AND AUTHORITATIVE LITERATURE
701 STANDARD REPORT ON BASIC GAAP FINANCIAL STATEMENTS
Standard Report--Defined Contribution Retirement Plan
DOL Requirement--Comparative Statement of Net Assets Available for Benefits and Current Year Only Statement of Changes in Net Assets Available for Benefits.
Standard Report--Defined Benefit Retirement Plan
Standard Report--Defined Benefit Retirement Plan That Presents Year-end Benefit Obligation Information in Separate Statements.
DOL Requirement--Comparative Statement of Net Assets Available for Benefits and Accumulated Plan Benefits at Year-end and Current Year Only Statement of Changes in Net Assets Available for Benefits and Changes in Accumulated Plan Benefits.
Standard Report--Defined Benefit Retirement Plan That Presents Year-end Benefit Obligation Information in Notes.
Standard Report--Defined Benefit Retirement Plan That Presents Year-end Benefit Obligation Information on the Face of One or More Other Statements.
Standard Report--Defined Benefit Retirement Plan That Presents Beginning-of-year Benefit Obligation Information in Separate Statements.
Standard Report--Defined Benefit Retirement Plan That Presents Beginning-of-year Benefit Obligation Information in Notes.
Standard Report--Health and Welfare Benefit Plan Financial Statements Presented in Accordance with SOP 92-6 (as Amended) Display Standards
Standard Report--Defined Contribution Health and Welfare Plan.
Standard Report--Defined Benefit Health and Welfare Plan--Benefit Obligation Information Presented in Separate Statements.
Standard Report--Defined Benefit Health and Welfare Plan--Benefit Obligation Information Presented on the Face of One or More Other Statements.
Standard Report--Defined Benefit Health and Welfare Plan That Presents Benefit Obligation Information in Notes.
Other DOL Reporting Requirements
Identification of Financial Statements.
Consistency Reference.
Departure from DOL Filing Requirements.
Signature, Date, and Location.
702 MODIFICATIONS OF THE STANDARD REPORT
GAAP Departure
Qualified vs. Adverse Opinion.
Omitted or Improperly Measured Accumulated Plan Benefits.
Updating an Auditor's Report That Previously Presented a Modified Opinion.
Updating an Auditor's Report That Previously Presented an Unqualified Opinion.
Omitted Disclosure of Prohibited Transaction That Is Also a Material Related-party Transaction.
Change in Actuarial Assumptions or Date of Benefit Obligation Information
Change in Location of Benefit Obligation Information
Nonreadily Marketable Investments
Acceptable Valuation Procedures and Documentation but Significant Range of Values.
Inadequate Valuation Procedures or Documentation.
Scope Limitation
Qualified Opinion
Qualified Opinion
Qualified Opinion
Disclaimer of Opinion
Disclaimer of Opinion
Updating an Auditor's Report That Previously Presented a Modified Opinion.
Going Concern Uncertainty
Disclaimer of Opinion Because of a Going Concern Uncertainty
Other Uncertainty
Terminating Plan
Decision to Terminate Made before Year End.
Terminating Plan That Presents Comparative Statements.
Uncertainty Related to Liquidation Values.
Decision to Terminate Made after the Plan Year End.
Reference to the Work of Other Auditors
Prior-period Financial Statements Audited by Predecessor Auditor
Reference to the Predecessor Auditor's Report.
Reference to the Predecessor Auditor's Report When the Predecessor Has Ceased Operations.
Error in Prior-period Financial Statements.
Effect of a Specialist's Work on the Auditor's Report
Optional Additional Language Related to Internal Control
Audits Performed in Accordance with GAAS and PCAOB Standards
703 REPORT ON BASIS OF ACCOUNTING OTHER THAN GAAP
OCBOA Report Illustration--Defined Benefit Retirement Plan That Presents Benefit Obligation Information in Notes
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information in Separate OCBOA Statements
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information on the Face of One or More Other OCBOA Statements
Benefit Obligation Information Not Presented in OCBOA Statements
Report on OCBOA Statements of Defined Contribution Retirement Plan or Health and Welfare Benefit Plan
Changes from One Basis of Accounting to Another
704 INITIAL AUDITS
705 DOL-REQUIRED REPORT ON REQUIRED SUPPLEMENTAL SCHEDULES
SAS No. 29 Report on Supplemental Schedules
Unmodified Opinion on Supplemental Schedules.
Unmodified Opinion on Supplemental Schedules on the Modified Cash Basis.
Unaudited Supplemental Information.
DOL Limited-scope Audit.
Opinion on Supplemental Schedules When Opinion on Basic Financial Statements Is Qualified.
Report on Supplemental Schedules When Opinion on Basic Financial Statements Is Adverse or Disclaimed.
Reporting on DOL Filing Requirements.
Omission of Immaterial Prohibited Transactions.
Omission of Material Prohibited Transactions.
Inconsistent Prohibited Transaction Information.
Omission of Other Information.
Inconsistent Information.
706 REPORTING ON A DOL LIMITED-SCOPE AUDIT
Section 103-12 Investment Entities
Qualify or Disclaim?
Qualified Opinion Because of DOL Limited-scope Audit
Disclaimer of Opinion Because of DOL Limited-scope Audit
Plan Administrator Unsure of Fair Value of Investments.
DOL Limited-scope Audit With a Change in Trustees During the Year.
DOL Limited-scope Audit in Prior Year by Predecessor Auditor.
Report on Comparative Financial Statements--DOL Limited-scope Audit in Preceding Year and Full-scope Audit in Current Year
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information in Separate Statements.
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information in Notes.
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information on the Face of One or More Other Statements.
Report on Defined Contribution Retirement Plan.
Report on Health and Welfare Benefit Plans.
Report on Comparative Statements--DOL Limited-scope Audit in Current Year and Full-scope Audit in Preceding Year
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information in Notes.
Report on Defined Benefit Retirement Plan That Presents Benefit Obligation Information in Separate Statements.
Report on Defined Contribution Retirement Plan.
Report on Health and Welfare Benefit Plans.
Modifying the Report on Required Supplemental Schedules
Explanatory Paragraph.
Qualified or Adverse Opinion on the Schedules.
CHAPTER 8: COMPILATION AND REVIEW ENGAGEMENTS
800 INTRODUCTION
What Are Compilation and Review Engagements?
Level of Service
Organization of This Chapter
801 AUTHORITATIVE LITERATURE
Accounting Literature
Compilation and Review Literature
Management-use-only Financial Statements.
802 ENGAGEMENT ADMINISTRATION
803 PRE-ENGAGEMENT AND PLANNING ACTIVITIES
Evaluation of Engagement Acceptance
Communication with Predecessor Accountant.
Engagement Acceptance Form.
Evaluation of the Level of Service to Be Performed
Establishment of Engagement Terms and Completion of an Engagement Letter
Gaining Knowledge of the Client and Its Industry
804 COMPILATION PROCEDURES
Documentation of Procedures and Reviews
Compilation Procedures, Review, and Approval Form.
Trial Balance Preparation Checklist.
Compilation Reporting Checklist.
805 REVIEW PROCEDURES
Review Performance Requirements
Inquiries
Other Inquiries.
Specific Inquiries for Employee Benefit Plans.
Analytical Procedures
Specific Analytical Procedures for Employee Benefit Plans.
Additional Procedures
Documentation of Procedures and Reviews
Review Procedures, Review, and Approval Form.
Trial Balance Preparation Checklist.
Inquiry and Analytical Procedures Program.
Analytical Procedures Documentation Form.
Review Reporting Checklist.
Representation Letter.
806 WRAP-UP AND ENGAGEMENT REVIEW ACTIVITIES
Documentation of Procedures
Disclosure Checklists.
Routing Instructions.
Accounting and Engagement Issues Form.
Other Documentation Requirements.
Filing Instructions
Subsequent Discovery of Facts Existing at Date of Report
807 REPORTING ON COMPILATION AND REVIEW ENGAGEMENTS
Reporting on Compiled Financial Statements
Standard Compilation Report.
Reference to Country of Origin.
Interim Reporting.
Reporting Departures from GAAP.
Compilations without Full Disclosure.
Failure to Disclose Accumulated Plan Benefit Information.
Failure to Disclose Benefit Obligations in Accordance with GAAP.
Reporting on Reviewed Financial Statements
Reporting Departures from GAAP.
Reporting on Supplemental Financial Information
Supplementary Information Accompanying Compiled Financial Statements.
Supplementary Information Accompanying Reviewed Financial Statements.
Supplementary Information Presented Alone.
Computer-prepared Financial Statements
Comparative Financial Statements
Reporting When Not Independent
Reporting When There Is a Scope Limitation
Other Comprehensive Basis of Accounting
Disclosure of Basis of Accounting.
COMPILATION AND REVIEW PRACTICE AIDS (EBP-CR)
EBP-CR-1: Engagement Acceptance Form
EBP-CR-2: Checklist for a Step-down Engagement (Audit to Review or Compilation/Review to Compilation)
EBP-CR-13: Routing Instructions for Processing Financial Statements
EBP-CR-14: Analytical Procedures Documentation Form
CONFIRMATION AND CORRESPONDENCE LETTERS (EBP-CL)
EBP-CL-1: Engagement Letters
EBP-CL-1.1: Audit Engagement Letter
EBP-CL-1.2: DOL Limited-scope Audit Engagement Letter
EBP-CL-2: Legal Letters
EBP-CL-2.1: Request for Legal Representation--Lawyer Is Requested to Provide Information
EBP-CL-2.2: Request for Legal Representation--Lawyer Is Requested to Confirm Information Provided by Client
EBP-CL-3: Management Representations
EBP-CL-3.1: Management Representation Letter
EBP-CL-3.2: Not Used
EBP-CL-3.3: Summary of Audit Differences
EBP-CL-3.4: Updating Management Representation Letter
EBP-CL-4: Internal Control Communications
EBP-CL-4.1: Communication of Significant Deficiencies under SAS No. 112
EBP-CL-4.2: Communication of Significant Deficiencies and Material Weaknesses under SAS No. 112
EBP-CL-4.3: Communication of Significant Deficiencies That Indicates No Material Weaknesses In Internal Control under SAS No. 112
EBP-CL-4.4: Separate Communication Indicating No Material Weaknesses under SAS No. 112
EBP-CL-4.5: Communication of Significant Deficiencies under SAS No. 115
EBP-CL-4.6: Communication of Significant Deficiencies and Material Weaknesses under SAS No. 115
EBP-CL-4.7: Communication of No Material Weaknesses in a Separate Report under SAS No. 115
EBP-CL-5: Communication with Those Charged with Governance
EBP-CL-5.1: Communication with Those Charged with Governance during Planning
EBP-CL-5.2: Communication with Those Charged with Governance at or Near the Conclusion of the Audit
EBP-CL-6: Cash Confirmations and Letter
EBP-CL-6.1: Standard Form to Confirm Account Balance Information with Financial Institutions
EBP-CL-6.2: Request for Subsequent Bank Statements
EBP-CL-7: Receivables Confirmations and Letters
EBP-CL-7.1: Confirmation of Contributions Received or Receivable
EBP-CL-7.2: Confirmation of Contributions Received--Itemized Statement Enclosed
EBP-CL-7.3: Confirmation of Loan Receivable
EBP-CL-8: Investments and Securities Confirmations and Letters
EBP-CL-8.1: Receipt for Securities Counted by Auditor
EBP-CL-8.2: Confirmation of Securities Held by Custodians or Trustees
EBP-CL-8.3: Confirmation of Discretionary Trust
EBP-CL-8.4: Confirmation of Common or Collective or Master Trusts
EBP-CL-8.5: Confirmation of Investment and/or Insurance Contract
EBP-CL-8.6: Request for Certification of Information by a Bank or Similar Institution or Insurance Company Holding Assets
EBP-CL-9: Not Used
EBP-CL-10: Debt Confirmations and Letters
EBP-CL-10.1: Confirmation of Loan Payable
EBP-CL-10.2: Confirmation of Compensating Balances
EBP-CL-10.3: Confirmation of Contingent Liabilities with Financial Institutions
EBP-CL-11: Not Used
EBP-CL-12: Other Confirmations and Letters
EBP-CL-12.1: Confirmation of Benefit Payments, Distributions, or Withdrawals
EBP-CL-12.2: Confirmation of Participant Data
EBP-CL-12.3: Request for Service Auditor's SAS 70 Report
EBP-CL-12.4: Letter Transmitting Audit Reports to the Plan (When the Auditor Has Not Reviewed Form 5500)
EBP-CL-12.5: Drafting Form for Client Information Request Letter
EBP-CL-12.6: Confirmation of Health and Welfare Benefit Plan Contract with Insurance Company or Claims Administrator
EBP-CL-13: Predecessor/Successor Communications
EBP-CL-13.1: Request for Predecessor Auditor to Release Information to Successor Auditor
EBP-CL-13.2: Letter Granting Successor Auditors Access to Workpapers
EBP-CL-13.3: Client Consent and Acknowledgment Letter
EBP-CL-13.4: Communication with Predecessor Auditor Prior to Final Engagement Acceptance
EBP-CL-13.5: Communication with Predecessor Auditor Prior to Engagement Proposal
EBP-CL-13.6: Request for Representation from Successor Auditor to Predecessor Auditor--Predecessor's Report is Reissued
EBP-CL-14: Principal and Other Auditor Communications
EBP-CL-14.1: Request for Representations from Other Auditor Who Audits the Financial Statements of the Plan Sponsor
EBP-CL-14.2: Request for Representations from Other Auditor Who Performs Audit Procedures on Certain Elements, Accounts, or Items in Financial Statements of the Plan Sponsor
EBP-CL-14.3: Instructions to Auditor Performing Agreed-upon Procedures at a Participating Employer in a Multiemployer Employee Benefit Plan
EBP-CL-15: Actuary Communications
EBP-CL-15.1: Request for Actuarial Information for Defined Benefit Retirement Plans
EBP-CL-15.2: Request for Actuarial Information for Defined Benefit Health and Welfare Plans
EBP-CL-15.3: Request for Actuary's Confirmation of Information Provided by Client
EBP-CL-16: Regulator Communications
EBP-CL-16.1: Letter to Regulator for Full-scope Audit
EBP-CL-16.2: Letter to Regulator for DOL Limited-scope Audit
EBP-CL-16.3: Letter Advising Client of Regulator Request for Access to Workpapers (When the Auditor Is Required by Law, Regulation, or Contract To Provide Access)
EBP-CL-16.4: Letter Requesting Client Approval of Regulator Request for Access to Workpapers (When the Auditor Is Not Required by Law, Regulation, or Contract To Provide Access)
FIRM POLICIES (EBP-FP)
EBP-FP-1: Audit Team Members
CHECKLISTS AND PRACTICE AIDS (EBP-CX)
EBP-CX-0.1: Application of Practice Aids to Engagements
EBP-CX-1: Planning and Preliminary Engagement Activities
EBP-CX-1.1: Engagement Acceptance Form
EBP-CX-1.2: Engagement Continuance Form
EBP-CX-1.3: ET Interpretation 101-3 Documentation Form
EBP-CX-1.4: Audit Decision Worksheet for Defined Benefit and Defined Contribution Retirement Plans
EBP-CX-2: Financial Statement Materiality Worksheet for Planning Purposes
EBP-CX-3: Understanding the Entity
EBP-CX-3.1: Understanding the Plan and Identifying Risks
EBP-CX-3.2: Engagement Team Discussion
EBP-CX-3.3: Fraud Risk Inquiries Form
EBP-CX-3.4: Audit Inquiries Summary Form
EBP-CX-4: Understanding Internal Control
EBP-CX-4.1: Understanding the Design and Implementation of Internal Control
EBP-CX-4.2: Financial Reporting System Documentation Form
EBP-CX-4.2.1: Financial Reporting System Documentation Form--Significant Transaction Classes
EBP-CX-4.2.2: Financial Reporting System Documentation Form--IT Environment and General Computer Controls
EBP-CX-4.3: Walkthrough Documentation Table
EBP-CX-5: Activity and Entity-level Control Forms
EBP-CX-5.1: Entity-level Control Form for Control Environment
EBP-CX-5.2: Entity-level Control Form for Risk Assessment
EBP-CX-5.3: Entity-level Control Form for Information and Communication
EBP-CX-5.4: Entity-level Control Form for Monitoring
EBP-CX-5.5: Control Activities Form for General Computer Controls
EBP-CX-5.6: Control Activities Form for Financial Close and Reporting
EBP-CX-5.7: Control Activities Form for Employer Contributions Received and Receivable
EBP-CX-5.8: Control Activities Form for Investments and Contracts with Insurance Companies and Similar Institutions
EBP-CX-5.9: Control Activities Form for Participant Data and Employee Contributions
EBP-CX-5.10: Control Activities Form for Benefit Payments
EBP-CX-5.11: Control Activities Form for Benefit Obligations and Participant Accounts
EBP-CX-5.12: Control Activities Form for Cash
EBP-CX-5.13: Control Activities Form for Property and Equipment Used in Operations
EBP-CX-5.14: Control Activities Form for Loans Payable
EBP-CX-5.15: Control Activities Form for Operating Expenses
EBP-CX-6: Identifying Risk
EBP-CX-6.1: Plan Risk Factors
EBP-CX-6.2: Fraud Risk Factors
EBP-CX-7: Risk Assessment
EBP-CX-7.1: Risk Assessment Summary Form
EBP-CX-7.2: Inherent Risk Assessment Form
EBP-CX-8: Planning Substantive Procedures
EBP-CX-8.1: Planning Worksheet to Determine Extent of Substantive Tests
EBP-CX-8.2: Sampling Planning and Evaluation Form--Substantive Tests
EBP-CX-8.3: Sampling Worksheet for Testing Account Coding and Classifications
EBP-CX-16.4: Accounting and Engagement Issues Form
EBP-CX-17: Engagement Administration
EBP-CX-17.1: Client Billing Information
EBP-CX-17.2: Engagement Status Report
EBP-CX-17.3: Audit Time Summary
EBP-CX-17.4: Confirmation and Correspondence Control
DEFINED BENEFIT PLAN CORE AUDIT PROGRAMS (EBP-APDB)
EBP-APDB-1: Defined Benefit Plan Audit Program for General Planning Procedures
Other General Planning Procedures for Defined Benefit Plans
EBP-APDB-2: Defined Benefit Plan Audit Program for General Auditing and Completion Procedures
Other General Auditing and Completion Procedures for Defined Benefit Plans
EBP-APDB-3: Defined Benefit Plan Audit Program for Minutes, Plan Documents, Contracts, and Agreements
EBP-APDB-4: Defined Benefit Plan Audit Program for Service Auditor's SAS 70 Reports
EBP-APDB-5: Defined Benefit Plan Audit Program for Contributions Received and Receivable
Other Defined Benefit Plan Audit Procedures for Contributions Received and Receivable
EBP-APDB-6: Defined Benefit Plan Audit Program for Investments and Related Income--DOL Limited-scope Audit
EBP-APDB-7: Defined Benefit Plan Audit Program for Investments and Related Income--Full-scope Audit
Other Defined Benefit Plan Audit Procedures for Investments and Related Income--Full-scope Audit
EBP-APDB-8: Defined Benefit Plan Audit Program for Contracts with Insurance Companies and Similar Institutions--DOL Limited-scope Audit
Other Defined Benefit Plan Audit Procedures for Contracts with Insurance Companies and Similar Institutions--DOL Limited-scope Audit
EBP-APDB-9: Defined Benefit Plan Audit Program for Contracts with Insurance Companies and Similar Institutions--Full-scope Audit
Other Defined Benefit Plan Audit Procedures for Contracts with Insurance Companies and Similar Institutions--Full-scope Audit
EBP-APDB-10: Defined Benefit Plan Audit Program for Participant Data and Employee Contributions
Other Defined Benefit Plan Audit Procedures for Participant Data and Employee Contributions
EBP-APDB-11: Defined Benefit Plan Audit Program for Benefit Payments
Other Defined Benefit Plan Audit Procedures for Benefit Payments
EBP-APDB-12: Defined Benefit Plan Audit Program for Benefit Obligations
Other Defined Benefit Plan Audit Procedures for Benefit Obligations
EBP-APDB-13: Defined Benefit Plan Audit Program for Other Assets, Liabilities, and Operating Expenses
Other Defined Benefit Plan Audit Procedures for Other Assets, Liabilities, and Operating Expenses
DEFINED CONTRIBUTION PLAN CORE AUDIT PROGRAMS (EBP-APDC)
EBP-APDC-1: Defined Contribution Plan Audit Program for General Planning Procedures
Other General Planning Procedures for Defined Contribution Plans
EBP-APDC-2: Defined Contribution Plan Audit Program for General Auditing and Completion Procedures
Other General Auditing and Completion Procedures for Defined Contribution Plans
EBP-APDC-3: Defined Contribution Plan Audit Program for Minutes, Plan Documents, Contracts, and Agreements
EBP-APDC-4: Defined Contribution Plan Audit Program for Service Auditor's SAS 70 Reports
EBP-APDC-5: Defined Contribution Plan Audit Program for Contributions Received and Receivable
Other Defined Contribution Plan Audit Procedures for Contributions Received and Receivable
EBP-APDC-6: Defined Contribution Plan Audit Program for Investments and Related Income--DOL Limited-scope Audit
EBP-APDC-7: Defined Contribution Plan Audit Program for Investments and Related Income--Full-scope Audit
Other Defined Contribution Plan Audit Procedures for Investments and Related Income--Full-scope Audit
EBP-APDC-8: Defined Contribution Plan Audit Program for Contracts with Insurance Companies and Similar Institutions--DOL Limited-scope Audit
Other Defined Contribution Plan Audit Procedures for Contracts with Insurance Companies and Similar Institutions--DOL Limited-scope Audit
EBP-APDC-9: Defined Contribution Plan Audit Program for Contracts with Insurance Companies and Similar Institutions--Full-scope Audit
Other Defined Contribution Plan Audit Procedures for Contracts with Insurance Companies and Similar Institutions--Full-scope Audit
EBP-APDC-10: Defined Contribution Plan Audit Program for Participant Data and Employee Contributions
Other Defined Contribution Plan Audit Procedures for Participant Data and Employee Contributions
EBP-APDC-11: Defined Contribution Plan Audit Program for Benefit Payments
Other Defined Contribution Plan Audit Procedures for Benefit Payments
EBP-APDC-12: Defined Contribution Plan Audit Program for Participant Accounts (and Benefit Obligations)
EBP-APDC-13: Defined Contribution Plan Audit Program for Other Assets, Liabilities, and Operating Expenses
Other Defined Contribution Plan Audit Procedures for Other Assets, Liabilities, and Operating Expenses
HEALTH AND WELFARE BENEFIT PLAN CORE AUDIT PROGRAMS (EBP-APHW)
EBP-APHW-1: Health and Welfare Benefit Plan Audit Program for General Planning Procedures
Other General Planning Procedures for Health and Welfare Benefit Plans
EBP-APHW-2: Health and Welfare Benefit Plan Audit Program for General Auditing and Completion Procedures
Other General Auditing and Completion Procedures for Health and Welfare Benefit Plans
EBP-APHW-3: Health and Welfare Benefit Plan Audit Program for Minutes, Plan Documents, Contracts, and Agreements
EBP-APHW-4: Health and Welfare Benefit Plan Audit Program for Service Auditor's SAS 70 Reports
EBP-APHW-5: Health and Welfare Benefit Plan Audit Program for Contributions Received and Receivable
Other Health and Welfare Benefit Plan Audit Procedures for Contributions Received and Receivable
EBP-APHW-6: Health and Welfare Benefit Plan Audit Program for Investments and Related Income--DOL Limited-scope Audit
EBP-APHW-7: Health and Welfare Benefit Plan Audit Program for Investments and Related Income--Full-scope Audit
Other Health and Welfare Benefit Plan Audit Procedures for Investments and Related Income--Full-scope Audit
EBP-APHW-8: Health and Welfare Benefit Plan Audit Program for Contracts with Insurance Companies and Similar Institutions--DOL Limited-scope Audit
Other Health and Welfare Benefit Plan Audit Procedures for Contracts with Insurance Companies and Similar Institutions--DOL Limited-scope Audit
EBP-APHW-9: Health and Welfare Benefit Plan Audit Program for Contracts with Insurance Companies and Similar Institutions--Full-scope Audit
Other Health and Welfare Benefit Plan Audit Procedures for Contracts with Insurance Companies and Similar Institutions--Full-scope Audit
EBP-APHW-10: Health and Welfare Benefit Plan Audit Program for Participant Data and Employee Contributions
Other Health and Welfare Benefit Plan Audit Procedures for Participant Data and Employee Contributions
EBP-APHW-11: Health and Welfare Benefit Plan Audit Program for Benefit Payments
Other Health and Welfare Benefit Plan Audit Procedures for Benefit Payments
EBP-APHW-12: Health and Welfare Benefit Plan Audit Program for Benefit Obligations
EBP-APHW-13: Health and Welfare Benefit Plan Audit Program for Other Assets, Liabilities, and Operating Expenses
Other Health and Welfare Benefit Plan Audit Procedures for Other Assets, Liabilities, and Operating Expenses
Continuing Professional Education
CPE & Training Solutions
INDEX
CPE related to these PPC Guides is now available!
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PPC offers print-based self-study in these topics:
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INTRODUCTORY MATERIAL
PREFACE
