Professional standards require employee benefit plan auditors to make certain internal control communications to their plan clients. This non-authoritative EBPAQC tool can help auditors prepare those communications. It contains example comments that may be useful in preparing required communications of internal control related matters identified in EBP audits, as well as management letters and other internal control communications.
The tool includes background information about required auditor internal control communications, and example comments in the following categories:
Oversight of the financial reporting process (fiduciary responsibilities, internal control over financial reporting, financial statement knowledge, documentation of the oversight process, segregation of duties, review and reconciliation of records)
Investments (selecting, monitoring, and valuing plan investments, securities lending, bank reconciliations)
Participant loans (loan repayments, interest rates, documentation, loan policy)
Participant accounts (monitoring, duplicate accounts)
Contributions (employee contributions, employer contributions)
Distributions (benefit payments, claims processing, vesting matters)
Third party service providers (monitoring and review)
Payroll/personnel records and census data (maintaining records, demographic data, census data, payroll compliance audits—multiemployer plans)
Plan fees and expenses (plan fees, plan expenses—multiemployer plans)
Parties in interest (documentation, transactions with parties in interest)
Other (forfeitures, uncashed checks, plan amendments, regulatory compliance oversight)
The examples have been taken from actual communications prepared by practitioners that have been edited to protect confidentiality. The company names used in the examples are fictitious. Any resemblance or similarities to real companies are entirely coincidental and beyond the intent of the Center. These examples are for illustrative purposes only and should be modified for the individual circumstances of each engagement.