For many retirement plan committees, the annual ERISA audit can feel like a compliance item to cross off the list. But if your plan requires an audit, selecting the audit firm isn’t just administrative—it’s a fiduciary decision you’re accountable for. In this post, we’ll outline what a qualified employee benefit plan (EBP) auditor should help you achieve, what to look for when evaluating firms, and a simple way to document your selection process.
Why Your Audit Firm Choice Matters
- Reduce risk. Stronger procedures and sharper testing can help uncover issues earlier—before they become larger (and more costly) problems.
- Stand up to scrutiny. Audit quality matters, especially when regulators come calling. A well-executed audit supports better governance and defensible decisions.
- File with confidence. Clearer reporting helps support an accurate Form 5500 and reliable plan financial statements.
A Practical Checklist for Selecting a Qualified EBP Audit Firm
1) Qualifications & EBP Focus
- Confirm the firm performs EBP audits regularly and has experience with plans like yours (size, investment complexity, and service providers).
- Ask whether they have a dedicated EBP audit team (not an occasional add-on) and how they supervise and review EBP engagements.
- Verify the engagement partner and manager have current, relevant EBP audit experience—and understand the type of audit expected (ERISA Section 103(a)(3)(C) audit—formerly “limited-scope”—vs. full-scope, as applicable).
- Look for evidence of EBP-specific training/CPE requirements for the team assigned to your plan.
2) Audit Quality & Oversight
- Request the firm’s most recent peer review results and make sure any findings are understood and addressed.
- Ask how the firm’s EBP practice is managed (for example, whether there’s an EBP quality leader/partner and what the engagement review steps look like before a report is issued).
- Discuss how they evaluate SOC reports from your recordkeeper/custodian and how they follow up on complementary user entity controls (CUECs) with the plan sponsor.
3) Audit Approach, Communication & Timeline
- Expect the firm to explain its approach to common plan risk areas such as contributions and timeliness of remittances, participant eligibility, distributions and loans, and investments/valuation.
- Ask for a sample timeline and a tailored prepared-by-client (PBC) list so you can plan ahead and avoid last-minute surprises.
- Confirm there will be a clear communication cadence (planning call, status updates, and an exit conference) and a defined process for issue escalation.
- Make sure the firm has the capacity to meet your deadlines, including Form 5500 review timing.
4) Independence, Data Security & Fees
- Confirm the firm’s independence and ask about any relationships with key providers (trustee/custodian, recordkeeper, or TPA).
- Understand how documents will be exchanged (secure portal, encryption, etc.) and how personally identifiable information (PII) will be protected.
- Require a fee proposal that is clear and comparable, with assumptions spelled out and examples of what could trigger out-of-scope work.
- Plan to document your selection—the final RFP, proposals received, scoring, and the rationale for your decision should be retained in the committee’s fiduciary file.
Use an RFP and Scoring Matrix to Document a Prudent Process
A straightforward request for proposal (RFP) helps you compare firms consistently and creates a record that you followed a thoughtful process. At a minimum, your RFP should capture a plan snapshot (plan type, year-end, assets, and key providers), the scope and deliverables (financial statements, auditor’s report, required communications, and Form 5500 consistency procedures), requested qualifications, the proposed audit approach, timeline/touchpoints, and pricing assumptions.
To make your decision easier to explain (and defend), use a simple scoring matrix: rate each firm 1–5 across categories like EBP experience, audit quality program, engagement team, approach/responsiveness, timeline, and fee transparency—then apply weights that reflect what matters most to your plan. Keep your completed scoring and notes alongside the RFP and proposals in your fiduciary file.
Need a Qualified EBP Audit Team?
If you’re not sure whether your current audit firm meets the “qualified” standard—or you want a more structured way to evaluate your options—Redwitz can help. We’re a qualified CPA firm with a dedicated team of employee benefit plan auditors, and we’re happy to talk through your plan’s needs, timeline, and what a smooth ERISA audit process can look like.
Disclaimer: This post is for general informational purposes only and is not legal advice. Consult your legal and benefits advisors regarding your specific plan and fiduciary responsibilities.