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Explanations for the Top Ten Tips to Prepare for an Efficient Audit - Utilize Annual Self-Audit as a Verification Tool

Periodic internal auditing of plan operations and administration may enable the plan sponsor to enjoy a high level of confidence about compliance with applicable qualified plan requirements. Annual audits provide a means for detecting compliance failures early and for prompt implementation of correction procedures under the Employee Plans Compliance Resolution System. Self-audits contribute to better plan administration by educating the responsible parties about the basic features and functions of the plan. Self-auditing should result in establishment of internal controls and other practices and procedures that will help avoid failures and will reinforce the goals of compliance and prompt correction of errors in the plan administration process. Performing self-audits is important even if the plan is never examined.

If the plan is selected for examination, a practice of regular self-auditing may be valuable. It will make preparation for the audit easier, because much or all of the needed documentation and information will have been collected and maintained in the process, including an inventory of any corrections that have been made. Self-auditing may demonstrate that the plan is operated with concern for compliance and may contribute to an agent’s decision to limit the examination.

For more information on self-auditing of a plan, visit the compliance monitoring section of the EP Examination Process Guide.

Page Last Reviewed or Updated: 22-Jan-2016