More than 1,000 accounting professionals attended this year's virtual AICPA & CIMA Employee Benefit Plans Conference to learn about key opportunities within the EBP space. Attendees gained expert insights and received valuable resources to guide their firm with this service offering. Among the highlights were the complimentary pre-conference Gear Ups sessions, including a topic I was excited to present, Uncovering Opportunities to Boost Quality and Efficiency in your EBP Audits.
In case you weren’t able to make it this year, here are a few key takeaways.
Membership in EBPAQC is a quick win
When auditing employee benefit plans, firms often struggle with inefficient processes and engagement quality. Traditional practice aids can lead to a fair amount of redundant data entry, other inefficiencies, and poor documentation, requiring extra work to ensure the audit complies with professional and regulatory requirements.
In fact, according to a report from the Employee Benefits Security Administration (EBSA) and DOL, 39% of employee benefit plan audits contained one or more major deficiencies. Even more startling, the number rises to 72% for firms who audit five or fewer EBPs. Also of note: the vast majority of those firms are NOT members of the Employee Benefit Plan Audit Quality Center (EBPAQ). So, a quick win right away for many of these firms with a lower volume of EBP audits is to investigate becoming a member of the EBPAQC. Non-members of the EBPAQC are over 2.5x more likely to have audit deficiencies than member firms.
Keep your team informed and engaged
To get the most out of your EBP team, you must motivate them in a healthy, productive way. Keep your team informed in the company’s direction. For instance, 85% of auditors say they’re most motivated when management provides regular updates on company news. Empower your auditors to challenge how they work – let them know you don’t want a same as last year mindset even though it feels “safe”. Engage with everyone on your team and be deliberate with when and how you communicate with clients. Perhaps most important, enable your team with a modern, adaptable set of tools.
Leverage a 5-step approach to the EBP audit
The session laid out five areas of focus to achieve the goals of: 1) more complete, linked documentation 2) faster arrival at an informed audit approach and 3) deliverables drafted automatically from procedural outputs. As you go through each step, keep in mind how methodology is tied to your firm’s technology:
- Ensure you understand the plan under audit
Leverage the right tools to gain a holistic understanding of the plan under audit early in the engagement. This will aid in identifying potential areas of risk and will help you audit more effectively by linking plan information extensively throughout the audit to avoid redundant entry. - Familiarize yourself with risks common to defined contribution plans
Fine-tuned methodology, augmented by technology, can help level the playing field around specialization. In this part of the process, technology and methodology should be pre-populating information based on what’s typical of a limited scope audit and include a risk assessment with assumptions for each financial statement area and the corresponding audit response. - Connect your understanding of the plan to risks common to employee benefit plan audits
Look to support each risk assessment area, help validate assumptions, and tailor audit programs in response. - Standardize your testing templates
Technology should support a consistent format with clear instructions, scoping and testing areas. - Standardize your footnote disclosures
Technology should include a financial statement template that contains comprehensive footnote disclosures, as well as footnotes disclosures that are automatically tailored in based on how you document your understanding of the plan.
Overall, technology decisions should be fueled by the impact to methodology – can you deliver faster, at higher quality, with more confidence, and to your customer’s satisfaction?
Drive efficient, high quality Employee Benefit Plan audits with OnPoint EBP
An exciting part of the session came at the conclusion as I went through a brief demonstration showing how OnPoint EBP, part of the OnPoint A&A Suite powered by CaseWare Cloud, serves as a comprehensive end-to-end solution that successfully enables the five key steps highlighted above.
For an up-close look into the ways OnPoint EBP expedites risk assessment and provides the right guidance to help ensure quality watch our 30-minute on-demand product tour.
Registration is now open for the 2022 AICPA & CIMA EBP Conference so take advantage of early bird pricing and sign up now. Networking and building connections have become an integral part of this conference, and we are already looking forward to sharing more valuable resources with you and your peers on some of the key opportunities within employee benefit plans.
