The AICPA Auditing Standards Board recently issued a proposal that would create a new auditing standard for auditors reporting on audits of the financial statements of employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA).
An exposure draft, Proposed Statement on Auditing Standards, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, contains the proposed guidance. The proposal addresses the auditor's responsibilities to form an opinion and report on the financial statements of ERISA plan financial statements.
The purpose of the proposal is to help auditors better understand their responsibilities with respect to these audits and to provide financial statement users with more information about auditors' responsibilities, particularly in limited-scope audits.
The form and content of reporting on the financial statement of employee benefit plans subject to ERISA are addressed in the proposal, including:
- Reporting on specific plan provisions relating to the ERISA plan financial statements, and
- Reporting when management imposes a limitation on the scope of the audit in accordance with ERISA Section 103(a)(3)(C).
For audits of ERISA plan financial statements only, the proposal, if issued as a final Statement on Auditing Standards, would apply in place of AU-C Section 700, Forming an Opinion and Reporting on Financial Statements, and Paragraph .09 of AU-C Section 725, Supplementary Information in Relation to the Financial Statements as a Whole.
Various AU-C sections in the AICPA Professional Standards also would be amended under the proposal, which would take effect on or after Dec. 15, 2018. Comments can be emailed to Sherry Hazel at Sherry.Hazel@aicpa-cima.com by Aug. 21.