Vital Information Regarding Employee Benefits Plan Audit
As stated by the Department of Labor, every company that offer employee benefits to more than 100 individuals should be audited by an independent accounting firm. The reason to have the audit is to ascertain if a company complies and meets the required financial responsibilities in relation to employee benefits. Carrying out an employee benefits plan audit requires a high degree of expertise, and there are standards that should be met hence you should be careful when choosing a CPA firm to do it. The auditors should carry out the audit in accordance with the guidelines set by the Internal Revenue Code (IRC). The primary purpose of an employee benefit plan audit is to identify the areas that the company should improve and manage the benefits well. Some of the vital aspects that the CPA firm will look into when carrying out the employee benefit plan audit include 401(k)s, pension plans, savings plans, and union representation among others.
Most companies fail to conduct an employee benefit plan audit in as much as it is required by the law since they do not understand the benefits. As a manager, you should have the audit if you want to avoid serious consequences and penalties put in place by the Department of Labor. Hence, having an EBP audit is a way to avoid issues with the authorities. In addition to the compliance reasons, you should consider EBP audit as a means of protecting your business against financial fraud and abuse. The business assets will be safeguarded from both internal errors and employee deception.
Using the EBP audit report, you can identify the potential areas that will help you save money and streamline employee benefits. Hiring a CPA firm for the EBP audit can be expensive, but you can protect your business from unnecessary expenditure in the long run. The information that is contained in the report can help you make better decisions regarding the existing employee benefits plan. After the audit, you will become a better human resource manager and financial resource manager to your business.
Based on these benefits, an EBP audit is an excellent opportunity for business managers to understand the financial well-being for the business. Ensure that you hire a CPA firm that has a team that is familiar with the IRC guidelines so that you can realize the associated benefits. Here is a guide to use when looking for a suitable CPA firm for an EBP audit.
The decision to hire an audit firm should be made after outlining all the areas to be covered. From the above discussion, you now understand the means of an EBP audit and how it is beneficial to both the employer and employees hence you should consider it.
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