Benefit Plan Management and Auditing Standards No. 136

Statement on Auditing Standards No. 136: Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA

Quick Facts
  • SAS No. 136, issued by the AICPA in July 2019, outlines new performance requirements for ERISA plan financial statement audits, and changes the form and content of the corresponding auditor’s report.
  • The “limited scope audit” is being replaced by the “ERISA Section 103(a)(3)(C) audit.”
  • Rather than a disclaimer of opinion, the auditor will issue an ERISA Section 103(a)(3)(C) auditor’s report containing a two-pronged opinion covering the audit and the procedures performed around the certified investment information.
  • Changes will be effective for periods ending on or after December 15, 2021.
What does this mean for you – plan management?

Additional Acknowledgements and Written Representations

Plan management is required to acknowledge its responsibility for the following in the engagement acceptance phase and provide written representation for the following at the conclusion of the engagement:

  • Maintaining a current plan instrument, including all plan amendments
  • Administering the plan and determining that transactions are presented and disclosed in conformity with plan provisions
  • Determining if an ERISA Section 103(a)(3)(c) audit is permissible under the circumstances
  • Determining if the investment information is certified by a qualified institution (29 CFR 2520.103-8) and if the certification meets applicable requirements (29 CFR 2520.103-5)
  • Determining if the certified information is appropriately measured, presented, and disclosed in accordance with the applicable financial reporting framework

Form 5500

Plan management will be required to provide the auditor a substantially complete draft of the Form 5500 prior to dating the auditor’s report. If the auditor identifies material inconsistencies, he or she will determine whether revisions to the Form 5500 or ERISA plan financial statements are needed.

Reportable Findings

The auditor is required to communicate in writing to those charged with governance all “reportable findings” from the procedures performed, including descriptions of the findings and their potential effects. Reportable findings may include:

  • Identified or suspected instances of noncompliance with laws or regulations
  • Findings significant and relevant to those charged with governance according to the auditor’s professional judgment
  • Internal control deficiencies that merit management’s attention according to the auditor’s professional judgment

For more information – please visit our EBP page.

The information provided in this communication is of a general nature and should not be considered professional advice.  You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.