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Statement on Auditing Standards for employee benefit plans

December 14, 2020 / 2 min read

The AICPA Auditing Standards Board (ASB) issued a Statement on Auditing Standards (SAS) No. 136. Learn more.

The AICPA Auditing Standards Board (ASB) issued a Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to Employee Retirement Income Security Act of 1974 (ERISA). The employee benefit plan (EBP) SAS addresses certain new performance and reporting requirements of ERISA benefit plans as well as significant changes to the form and content of the auditor’s report on such financial statements. This update will focus on the impact to plan sponsors regarding the clarifications of the EBP SAS.

Overview

In July 2019, the Auditing Standards Board (ASB) issued a Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to Employee Retirement Income Security Act of 1974 (ERISA). The EBP SAS is intended to improve audit transparency while focusing on enhancing the auditor reporting model for audits of ERISA-plan financial statements by taking into consideration the specialized nature of plan operations.

What changed?

Although the EBP SAS generally affects the auditor responsibilities, plan sponsors and management of benefit plans subject to ERISA, can expect the following changes:

The EBP SAS also includes requirements for auditors regarding:

Plan sponsors can refer to the full EBP SAS for more information.

Effective date and transition

Originally, the effective date of the EBP SAS was for periods ending on or after December 15, 2020. In May of 2020, the AICPA issued SAS 141, Amendment to the Effective Dates of SAS Nos. 134-140, which amends the effective date of the EBP SAS to periods ending on or after December 15, 2021, in order to provide more time for firms to implement these standards in light of the effect of the coronavirus pandemic. SAS 141 permits early implementation; however, SAS 134-140 are interrelated, the Auditing Standards Board recommends that all the standards be implemented concurrently.

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