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| April, 2004 |
Employee Benefit Plans Advisor
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Employee Benefit Plans—Focus on Audit Quality
by James E. Merklin, CPA, CFE, M.Acc.
In February 2003, the Employee Benefit Security Administration
(EBSA), a division within the U.S. Department of Labor (DOL),
initiated its second nationwide review to assess the quality of
employee benefit plan audits. It is our understanding that this
review was recently completed and that the results of this
review will be published very soon. Independent sources tell us
the review, which covered 300 plans and included 15 areas of
examination, revealed a high incidence of audit deficiencies and
failures.
Bober, Markey, Fedorovich
& Company has
always placed a very high level of emphasis on ensuring our
clients receive high quality services. We have gone to great
lengths to ensure our staff is well trained in this highly
complex field, including sending key personnel to specialized
training and conducting in-house training for all of our audit
and tax personnel involved in this field. This training,
combined with close supervision of staff on audit engagements
and by hands-on participation of our Partners and Managers in
the audit process, provides assurance to our clients that we
take the quality of audit services in this area very seriously.
The stakes in this field are high. In the DOL
fiscal 2003 annual report, the Office of Inspector General
identified security of pension assets, including cash-balance
pension plans, as one of the DOL's most serious management and
performance challenges. In accordance with the provisions of
Title I of the Employee Retirement Income Security Act of 1974
(ERISA), the EBSA oversees approximately 730,000 private pension
plans holding more than $4 trillion in assets on behalf of more
than 45 million workers.
To further demonstrate our commitment to
quality, Bober, Markey, Fedorovich
& Company was amongst the
first CPA firms in the country to join the AICPA's newly formed
Employee Benefit Plan Audit Quality Center, which requires
member firms to maintain and demonstrate high quality audit
services in this field, obtain minimum amounts of continuing
professional education in audits of plans, include plan audits
in their triennial peer reviews, etc. Joining this Center was an
easy decision for us, since we were already doing everything
that they require of members.
In addition to publicizing the review's
outcomes, the DOL study report is likely to recommend remedies
for consideration by legislators and regulators. Bober, Markey, Fedorovich
& Company will be monitoring developments very
closely and will advise you of any potential implications to
your benefit plans. BMF&C
James E. Merklin, CPA, CFE, M.Acc. is our Director of
Employee Benefit Plan Audit Services and, in addition to being
heavily involved in our plan audits, he has also been active in
a leadership role in the establishment of a national discussion
forum amongst our affiliates in the PKF North American Network.
This discussion forum has provided Bober, Markey, Fedorovich
& Company the opportunity to share best practices ideas
amongst the more than 80 CPA firms nationwide that are
affiliated with PKF.
If you have any questions with regards to
these developments, please feel free to call Jim at 330-762-9785
or email him at jimm@bobermarkey.com,
or your Partner/Manager contact.
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