Does your company have a retirement plan, such as a 401(k) or ESOP, and cover 100 or more participants? If so, you’re required by law to have an annual audit of the plan completed and filed with the IRS and Department of Labor (DOL). The annual audit, completed by a qualified and independent CPA firm, is required to be attached to the filing of the Form 5500 for retirement plans that meet the definition of a “large plan.”
A large plan is a retirement plan that includes over 100 eligible participants on the first day of the plan year. Eligible participants may be any of the following:
There are two exceptions to the large plan audit requirement:
The accurate determination of the number of eligible participants is critical, given that this number determines the need for an annual audit.
If you still have questions to determine if your retirement plan is subject to an annual audit, contact Karlie Johnson, CPA at email@example.com.
Karlie Johnson is a director in the commercial audit and review service area at Redpath and Company. She assists with audited and reviewed financial statements in the manufacturing, construction, professional services, and distribution industries. Karlie specializes in employee benefit plan audits and helps business owners meet their fiduciary responsibility to hire an experienced plan auditor and avoid deficient plans that could cause tax disqualifications within their 401k audits. She also advises her clients regarding internal controls and external processes that help them clearly communicate their financial results. Karlie has provided public accounting services at Redpath and Company since 2005.More posts by Karlie Johnson
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