Introduction
Our Commitment to Audit Support
What needs can BDG’s A&A Support fill?
How does BDG provide A&A Support?
Why is BDG uniquely qualified to provide A&A Support?
What does A&A Support cost?
Preparing for Your Upcoming Plan Year Audits
For More Information
Index of 401(k) Plan Audit Documentation

Introduction 

Employee Benefit Audit & Accounting Support (“A&A Support”) is a comprehensive pre-audit financial information packaging service that we are uniquely qualified to provide to corporate human resource, financial, and accounting professionals. This service precedes and helps simplify the actual audit of any employee benefit plan requiring an annual audit, particularly 401(k) and, starting in 2009, 403(b) plans.

Our Commitment to Audit Support

A&A Support has been built upon two decades of experience with employee benefit plan accounting and attestation for many prominent public and private companies. We encourage you to browse through this web site for more information about the history and success of our firm, and about the traditional tax, accounting, auditing, and business valuation services upon which our firm was founded. Becher, Della Torre, Gitto & Company, CPAs (“BDG”), founded in 1982 by partners with over 25 years of Big Four experience, primarily with PricewaterhouseCoopers, is pleased to introduce you to A&A Support and our addition of nationally recognized 401(k) and 403(b) specialist, Larry Heller, an Enrolled Actuary with over 25 years of experience in the design and administration of employee benefit plans, including several years as a Director at PricewaterhouseCoopers. Larry joins the BDG accounting team as director of employee benefit services, to further enhance our retirement and health and welfare plan services and A&A Support beyond typical CPA skills. See his biography below.

What needs can BDG’s A&A Support fill? 

Attached here is a sample index of the pre-audit financial reports and services provided by A&A Support. This research and documentation has proven to be extremely valuable to... 

• ...corporate CFOs and accounting staff, who typically do not have sufficient time to document or monitor employee benefit plan internal controls, financial statement preparation, and related reporting requirements of the Department of Labor (“DOL”) and Generally Accepted Auditing Principles (“GAAP”), yet remain responsible for them.  BDG is intimately familiar with all GAAP and DOL reporting requirements, and has established comprehensive risk-based internal control documentation for its clients.  Through A&A Support, BDG drafts the financial statements and all supporting footnotes and schedules.

• ...human resource executives and staff, who usually do not have accounting backgrounds, yet also have audit-related responsibilities.  BDG is sensitive to this, and our A&A Support product aids in their understanding of controls and accounting requirements, coordinating with corporate accounting and our clients’ outside service-providers, including Big Four accounting firms.

Big Four and other CPA firms often view employee benefit plan audits as a necessary client service, but not their main corporate audit work, often assigning junior accountants with minimal experience, which can lead to training and independence issues.  At BDG, employee benefit plan audits are one of our core services, with dedicated and centrally located staff at junior and senior levels providing continuity and perspective. Our A&A Support service culminates with the presentation of the comprehensive package of financial reports and information summarized on this sample index.  This compilation positions the plan as fully prepared for its annual audit, saving corporate accounting and human resources time and expense during both the pre-audit and audit processes, and sets the stage for an efficient, lower risk, independent accountant audit.

How does BDG provide A&A Support?

BDG works with its clients and their plans’ service providers in a methodical eight-step process: 

1.     efficiently gathering all pertinent documents, usually directly from trustees and third-party administrators; 

2.     reviewing internal accounting controls and DOL corporate governance compliance; 

3.     documenting findings, via executive level analytical procedures that note key controls, compliance risk exposures, and recommendations designed to improve plan operations and accounting; 

4.     compiling GAAP financial statements, including reconciliations to subsidiary detail, analytical procedures, drafting footnotes, and DOL-required schedules; 

5.     ensuring that the plan’s financial statements support and reconcile to IRS Form 5500, coordinating with the plan’s administrator and 5500 preparer;

6.     documenting GAAP and DOL compliance; 

7.     performing specific Agreed-Upon Procedures authorized by the plan sponsor, as needed, such as data sampling for issues specifically cited by plan management, in keeping with guidelines established by the American Institute of Certified Public Accountants (“AICPA”);  and 

8.     deliver a comprehensive financial statement and internal control document package to human resources, finance, accounting, and independent accountants.  

Why is BDG uniquely qualified to provide A&A Support? 

1.     BDG has performed over a thousand certified audits for prominent public and private companies over more than two decades.  For example, our attestation clients include one with annual sales over $300 million and another with over $1 billion in real estate holdings. 

2.     Our audit quality control system has been formally reviewed every three years since 1983, receiving all unqualified reports.  In 2007, BDG earned “no letter of comment”, the highest rating possible from both the Public Company Accounting Oversight Board (PCAOB) and the AICPA after each of their quality control peer reviews of our audit services. 

3.     With the addition of nationally recognized employee benefit talent, A&A Support’s internal control and corporate compliance services extend beyond common CPA employee benefit knowledge, ensure coordination among all of your plans’ service providers, and facilitate high-level issue resolution across your plan’s administrators and consultants.  (Note that A&A Support is not an actuarial or HR consulting service.) 

4.     We have successfully performed hundreds of DOL-required employee benefit plan audits for nationally recognized companies for more than two decades.  We have developed highly efficient and effective processes  --  from document gathering to implementing new GAAP pronouncements  --  leading to the full package now offered by A&A Support. 

5.     Our professionals are specifically trained in employee benefit plan accounting and attestation and have extensive on-the-job employee benefit plan experience. 

6.     We develop long-term, mutually rewarding, and highly responsive relationships with the many corporate HR and financial management people we serve.  

What does A&A Support cost? 

Our fees are highly competitive compared to other firms providing similar services.  Our size and centralized staff enable us to charge approximately 50% of Big Four rates.  Yet our mature employee benefit plan audit practice  --  including its processes, training, and experience  --  enable us to provide professional services such as A&A Support in a manner that saves time and expense for many HR, accounting, and auditing functions. Other than travel and courier-related charges, our fees for our services are entirely based upon the time we devote to each plan, and will be quoted in advance. We are confident that our approach to this pre-audit service will quickly pay for itself when considering the reduced time and expense required of both internal and external HR, accounting, and auditing service providers during the pre-audit and audit phases of this annual process. With this in mind, we encourage you to share our unique qualifications, approach, and history of success with your corporate human resource, financial, and accounting people.  

Preparing for Your Upcoming Plan Year Audits 

Larry Heller and our Audit Partners, Neil Della Torre and Jim Becher, would be happy to discuss A&A Support with you, and any of your HR, finance, and accounting personnel that may be interested.  We would enjoy the opportunity to provide client references and samples of the A&A Support package summarized here.  

For More Information 

Please do not hesitate to contact us at 201-652-4040, lheller@bdgcpa.com, ndellatorre@bdgcpa.com, or jbecher@bdgcpa.com.  We look forward to hearing from you.  

INDEX OF EMPLOYEE BENEFIT PLAN AUDIT DOCUMENTATION  --  401(k) PLANS

BDG’s pre-audit A&A Support process produces the following documentation required for the annual audit of a 401(k) plan, suitable for management, human resources, financial, and accounting purposes: 

1.     Executive summary of plan activity for the year  --  discussion and analysis of financial activity, plan and regulatory changes, and any other issues relevant to senior management;

2.     Draft financial statements  --  in accordance with Generally Accepted Accounting Principles (GAAP) and Department of Labor (DOL) requirements, including all required footnotes and schedules; 

3.     Summary of Activity  --  a summary trial balance, documenting the flow of plan activity during the audit period, supporting the financial statements and reconciled to the plan trustee’s certified report for the plan year; 

4.     Supporting schedules and reconciliations  --  the detail underlying the most significant information presented on the Summary of Activity, as reported by the plan’s trustee and recordkeeper, such as contributions, distributions, loans, rollovers, and the impact of corporate events such as mergers, acquisitions, and divestitures; 

5.     GAAP and DOL disclosure  --  based on responses compiled from a comprehensive questionnaire, a summary of all plan year issues to be considered for disclosure based on GAAP and DOL requirements for the reporting of plan assets; 

6.     Internal control review  --  based upon a comprehensive questionnaire designed to identify company policies and procedures and related risk, highlighting key controls and recommendations;  ultimately, this review is designed to improve the accuracy of the plan’s financial statement and promote the overall efficiency of plan operations; 

7.     Prohibited Transaction Checklist  --  verification of the plan year activity against a checklist of potentially prohibited transactions; 

8.     Key test reports  --  results of the plan’s top heavy, ADP, and ACP testing performed by the plan’s recordkeeper and/or other third-party administrators; 

9.     Legal activity (if any)  --  summary of plan issues under review by in-house or external counsel;  and 

10.    Other reports  --  as deemed helpful for corporate, human resource, financial, or independent accountant clarity.  BDG’s Employee Benefit Plan Audit process then produces a comprehensive report including the financial statement for the plan year under review and BDG’s formal opinion of the financial statement based upon the information provided for the audit.

Larry Heller is an Enrolled Actuary and Director of BDG’s employee benefit services. He joined BDG in 2006 after a distinguished career with many of the leaders of the benefits consulting industry -- as a Principal and Director in the retirement administration and consulting practices of Kwasha Lipton, Mercer, PricewaterhouseCoopers, and Buck Consultants. Larry is a graduate of Brown University with over 25 years of experience in the design, administration, and communications of company-sponsored benefit plans. He has spoken frequently at benefits conferences, authored numerous articles, and was cited by HRO Today magazine in 2005 as one of the nation’s leaders among human resource outsourcing advisors.