Statement on Auditing Standards No 136 (SAS 136) is effective for audits of ERISA plan financial statements for periods ending on or after December 15, 2021. This standard is an auditing standard change, and mostly impacts the way your independent auditor performs the audit and the audit report itself. However, did you know this standard includes changes to management’s responsibilities as well?
This standard requires that management provide the following representations to the auditor:
- That management has provided the auditor with the most current plan instrument for the audit period, including all plan amendments.
- That management acknowledge its responsibility for administering the plan and determining that the plan’s transactions presented and disclosed in the ERISA plan financial statements are in conformity with the plan’s provisions, including maintaining sufficient records with respect to each of the participants to determine the benefits due or which may become due to such participants.
- That management will provide the auditor, prior to the dating of the auditor’s report, a substantially complete draft of Form 5500.
- When management elects to have an ERISA Section 103(a)(3)(C) audit (formerly referred to as a limited-scope audit), management must acknowledge that the election of the ERISA Section 103(a)(3)(C) audit does not affect its responsibility for the financial statements and determine whether:
- An ERISA Section 103(a)(3)(C) audit is permissible under the circumstances
- The investment information is prepared and certified by a qualified institution as described in 29 CFR 2520.103-8
- The certification meets the requirements in 29 CFR 2520.103-5, and
- The certified investment information is appropriately measured, presented, and disclosed in accordance with the applicable financial reporting framework.
Contact us to further understand how the Statement on Auditing Standards No 136 impacts you!
This article was written by Jill Galle, CPA and Shareholder in our Missoula office.