December 9, 2019 – In response to a request from the Chief Accountant of the Department of Labor, the Auditing Standards Board (ASB) recently issued Statement on Auditing Standards (SAS) 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, which specifically addresses audits of financial statements of employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). This new audit standard has the goal of improving audit quality over employee benefit plans.

SAS 136 provides more specific guidance in audit requirements of employee benefit plans. Specifically, the audit requirements cover the following topics:

• Client acceptance;
• Audit risk assessment and responses, including consideration of the plan’s provisions;
• Communication of reportable findings to those charged with governance; and
• Auditor’s responsibility regarding the ERISA required supplemental schedules.

A new audit report format from SAS 136 provides more information on the scope of the audit, responsibilities of the auditor as well as management’s responsibilities, and enhanced reporting relating to going concern. The limited scope audit report is also modified and referred as the “ERISA section 103(a)(3)(C) audit” and will have a two-pronged opinion that is based on the audit and on the procedures performed relating to the certified investment information. The final version of the SAS 136 does not include the requirement for including compliance findings from the audit in the auditor’s report that was proposed in the exposure draft.  However, certain compliance findings are required to be communicated to those charged with governance.  The effective date of SAS 136 is for periods ending on or after December 15, 2020.

This article is an excerpt from Dopkins Employee Benefits Newsletter.  To read the complete content, please click here.

For more information, please contact Jim Krupinski, CPA at jkrupinski@dopkins.com.

About the Author

James A. Krupinski CPA

Jim has 25 years of experience providing audit and consulting services to clients from a diverse range of industries. In addition to his many audit management responsibilities, he currently serves as the leader of the Firm's risk management services group. He has assisted his clients with performing risk assessments, evaluating and improving internal controls, developing fraud prevention programs and complying with the requirements of Sarbanes Oxley's assessment of internal controls over financial reporting requirements.