Changes to ERISA Plan Auditor Reporting


Written by Briana Peters

January 2, 2020

On July 10, 2019, the Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. SAS No. 136 is the result of an effort to improve the clarity of the auditor’s report for ERISA plan financial statements and to include performance requirements specific to auditing ERISA plans.

The SAS provides guidance on the following:

  1. The auditor’s responsibility to form an opinion on the financial statements of employee benefit plans subject to ERISA
  2. The form and content of the auditor’s report issued as a result of the audit of the financial statements, including the form and content of the report when management elects to have an ERISA permitted limited scope audit performed

SAS No. 136 creates a new AU-C Section 703 in the AICPA Professional Standards and creates new reporting requirements for Employee Retirement Income Security Act financial statements when management elects to exclude from the audit certain investment information held and certified by a qualified institution, as permitted by ERISA. The new report format will apply to engagements that formerly were known as “limited-scope” audits. Those audits going forward will be called “ERISA Section 103(a)(3)(C)” audits.

New requirements in SAS No. 136 also include items related to:

  • Engagement acceptance
  • Audit risk assessment and response
  • Communications with those charged with governance
  • Procedures for an ERISA section 103(a)(3)(C) audit
  • Considerations for filing Form 5500

SAS No. 136 applies to an audit of a complete set of general-purpose financial statements of employee benefit plans subject to ERISA. It is effective for audits of Employee Retirement Income Security Act plan financial statements for periods ending on or after December 15, 2020 (this would be the December 31, 2021 audit for calendar year-end plans). Early adoption of this SAS is not permitted.

Please contact a member of the Hawkins Ash CPAs employee benefit plan team if you have any questions or need assistance regarding this topic.

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Briana Peters
As a Partner in the Firm’s Green Bay office, Briana provides audit, review, and tax services to nonprofit organizations. In addition, she works on audits of employee benefit plans and commercial entities. She is also the Director of Training for the Firm.

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