When is a 401k audit needed?

If a company’s 401k plan has over 100 eligible participants, then it is mandatory to complete a 401k plan audit. To comply with government regulations, a 401k audit must be conducted a minimum of once a year. Regular audits ensure that the individuals managing the plan are following proper procedures and that the plan is running efficiently.

A 401k audit will ensure prohibited transactions are avoided

Before a company has a 401k audit, they are required to also complete Form 5500 and file it with the United States Department of Labor. The responsibility of an auditor is to carefully examine those payments made by the employee and employer. The auditor needs to ensure that all the accounting principles are abided by and nothing is overlooked.

In order to complete a 401k audit, a company must provide certain information to the firm completing the audit. The information needed would include all employee work records for the year of the audit, and a breakdown of how much money is contributed by each. A copy of the Plan Amendments and any pending changes to the Plan should also be made available. Furthermore, an auditor will need to have a copy of the current year's Form 5500 and a copy of the year end compliance and discrimination testing.

How can Miller Kaplan Arase help you?

Generally, most accounting firms do not have a focus on servicing employee benefit plans, or invest in the training needed to perform a 401k audit efficiently, but Miller Kaplan Arase does. At Miller Kaplan Arase, we offer a team of dedicated 401k plan audit professionals that understand the intricacies of performing a 401k plan audit and can perform the work efficiently and cost effective.

If you would like additional information about our processes or would like to request a proposal, contact us online or call us at (818)769-2010.