First, the bad news: Three out of every 10 employee benefit plan audits in Maryland fail to meet minimum requirements for professional standards, according to the Department of Labor. That means more than $38 billion in Maryland plan assets are currently at risk due to deficient audits.
“In our view, this rate is both abnormally high and disconcerting,” Department of Labor Chief Accountant Ian Dingwall told me recently.
Maryland isn’t alone. Deficiency rates for the country as a whole are nearly as high. And thanks to a rule that will soon require 403(b) plans to be audited just as 401(k)s are today, the number of audits being done will soon rise by up to 10 percent, and DOL officials worry the number of deficient audits will rise with them.
Read more about the potential causes and impacts of the deficiencies here.
Now, the good news: CPAs and DOL officials are joining forces to try to improve those numbers. Here are just of a few of the ways in which they are doing so:
There are a number of other resources available as well, all of them designed to increase the proficiency of employee benefit plan auditors. They include the following:
What’s your take on these deficiencies? What else should be done to improve audit quality?
Learn more at the ExpoDOL Chief Accountant Ian Dingwall will be on hand to discuss audit quality in person at the first-ever Maryland Business and Accounting Expo, slated for June 17-18 at the Baltimore Convention Center. Get details about the Expo and register here.