The 401(k) Audit CPA Success Show: Recent Episodes
Summit CPA Group
Do you have 100 eligible participants in your 401(k) Plan? If so, you might need a 401(k) Audit. Since 2013, Summit CPA Group has helped make the audit process as smooth as possible for companies across the United States. This podcast seeks to help companies learn everything they need to know about 401(k) Audits, the audit process, and what you need to look for when searching for a 401(k) auditor.
Tune-in monthly as our host Jamie Nau interviews our Director of Audit Kim Moore and other members of the Summit CPA Group audit team to share the knowledge and experience acquired from our decades of experience performing 401(k) Audits. We'll answer some of the most common questions like does my company need a 401(k) audit? What do we need to do to prepare for a 401(K) Audit? And much, much more.
Topics discussed in this episode include:
- How SAS 143 and SAS 145 can impact your 401(k) plan audit.
- The considerations you need to take with your IT environment, even if either your plan or your IT work is managed by a third-party.
- The consequences of changes to Form 5500 and why this change especially matters for companies hovering around the 100-participant threshold.
Episode resources:
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Request a 401(k) audit consultation
Topics discussed in this episode include:
- Top takeaways from the Audit Quality Study
- Which sections of an EBP audit have the highest rates of errors
- The questions to ask your audit firm to determine whether they have the experience your business needs
Episode resources:
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Request a 401(k) audit consultation
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
Topics discussed in this episode include:
- Tips on defining roles within your 401(k) plan to promote more cohesion
- The importance of access reviews and why access levels are an equally important part of the discussion
- Benefits of a compliance calendar, plus tips to create one that helps you meet deadlines and improve processes
- Why hiring an investment advisor could help improve participant satisfaction and be a part of your due diligence
Episode resources:
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director and 401(k) Audit Practice Leader, Kim Moore, with questions.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
“We always say that you can outsource the responsibility, but you can't outsource accountability. And you as the fiduciary are responsible. Even though you have hired this third party and you have a contract and everything else, you're still ultimately responsible for whatever happens. So, if something goes wrong and the money gets dispersed to the wrong person, you could be held liable.”
Topics discussed in this episode include:
- How failure to comply with ERISA, DOL or IRS compliance guidelines can result in hefty fines, legal action and even jail time for plan fiduciaries
- The importance of obtaining a fidelity bond, also known as an ERISA bond, even if a third-party administrator says it’s not necessary
- Discrimination testing best practices to ensure timely compliance so you can avoid paying excise taxes
- Why plan sponsors and administrators should regularly review plan distributions
Episode resources
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director and 401(k) Audit Practice Leader, Kim Moore, with questions.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
“[Cybersecurity protection] is not something in passing that [the Department of Labor is] involved in, not something that once a breach occurs, now they're gonna get involved. They're trying to be more preventative. We're trying to get the information out to all of our clients, as well as anyone listening here: this is something you need to pay attention to.”
Topics discussed in this episode include:
- Plan sponsors have a fiduciary duty to ensure the safety of participants’ assets from fraud, even if the funds are managed by a service provider
- The Department of Labor may ask about your company’s cybersecurity protections during unrelated visits to test your readiness
- Documenting proactive, annual risk assessments and quarterly or monthly control reviews is a critical way to provide proof of good-faith effort to keep your plan and participants protected
- ERISA bonds will not cover a fraud situation, so invest in an insurance plan to keep your plan and your company covered in case of a breach.
Episode resources
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director and 401(k) Audit Practice Leader, Kim Moore, with questions.
- Discover how Anders Technology Groupworks with your organization to protect against cyber threats.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
“It can be worse than time-consuming to fix administrative errors, it can be very costly. Make sure you leave time in your schedule to review the forms, make sure they're correct and get them filed on time.”
Topics discussed in this episode include:
- Guidance on how to extend deadlines
- A breakdown of the different schedules and how they apply to 401(k) plans
- Tips for avoiding penalties and fees caused by inaccuracies on your Form 5500
- Instructions on how to work with a third-party service provider to keep the process moving forward
Episode resources
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director and 401(k) Audit Practice Leader, Kim Moore, with questions.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
“But I would caution you if an auditor is…half of all other ones… I would be a little bit suspicious of why are their costs so much less. Maybe they have a valid reason…but at the same time if they’re trying to get into something that they really don’t know what they’re doing, that’s one of the ways that’d be a red flag.”
Topics discussed in this episode include:
- Questions to ask to verify a potential auditor’s qualifications
- The differences between billing and pricing methods used by auditing firms
- Resources to use to find a qualified auditor
- Deciding between a local auditor and a remote firm, plus the benefits and costs to both options
Episode resources
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director + 401(k) Audit, Kim Moore, with questions.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
“If it's a first-year audit, they usually take a little longer, as you can imagine. I get calls from people that this is a first audit and they say, ‘Can you do my audit tomorrow?’ I can start tomorrow, but I'm not going to finish it in a day. That's just not even possible. So you want to make sure that you talk to your auditor about timing.”
The information discussed in this episode includes:
- A walkthrough of the general layout of a first-time 401(k), from first steps to closing out an audit
- Important timing considerations to understand before beginning your audit to avoid costly delays
- How best to prepare necessary documents in time for the audit to maximize efficiency
Episode resources
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director + 401(k) Audit, Kim Moore, with questions.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
“Getting that [third-party administrator] questionnaire turned around quickly is really important, as well as if the provider's asking you for some type of year-end payroll report, a census, those are terms we see a lot. That is going to get folded into the discrimination testing that your service provider's going to do, and that's very important that that gets done, that it's accurate and that it's timely.”
Topics discussed in this episode include:
- How auto-enrollment can drive high plan participation and lower your organization’s risk of failing discrimination testing
- What triggers the need for your first 401(k) audit and details to help you prepare
- Why “compliance calendars” are absolutely critical to run a plan as smoothly as possible despite how overwhelming it may initially feel
Episode resources
- Watch episodes of The 401(k) Audit CPA Success Show on YouTube.
- Learn more about the Anders 401(k) process and pricing.
- Email our Director + 401(k) Audit, Kim Moore, with questions.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing:https://anderscpa.com/401k-audits/
“If you delay getting us the information and there's a problem, it can't get resolved. More than likely, your audit is going to be late just because we've got others to work on. It's just the way it is. You have the fiduciary responsibility over the plan. So anything you can do to help us figure out those problems is going to be greatly appreciated by your auditor, but will also save you a lot of time and help you to file on time.”
The finer details in this episode:
- Tips and tricks to speed up the audit process
- Importance of working with an auditor on missing paperwork
- The role of a third-party provider on the audit process
"It does have some pretty big implications for those of you that either are a 401k plan participant or if you are the planned sponsor of a 401k plan, we wanted to kind of keep you updated so this doesn't hit you as a surprise because we do believe it's going to become law. It's just a matter of when and exactly what's included in the bill" - Kim Moore
The finer details in this episode:
- Secure Act 2.0 major provisions and their implications explained
- Qualifications and requirements that participants and plan sponsors need to know
- What does this mean for younger professionals? for part-time employees? for employers?
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"We're very excited about the possibilities...the joint marketing, the results of that, how that plays into the rules going forward, and the way that impacts our interactions with clients and prospects going forward are some of the really exciting parts of the combination." - Mark Henson
The finer details in this episode:
- What does it mean for Summit CPA's audit team now that Anders and Summit is merging?
- What are the differences and similarities of the services that Anders and Summit provide?
- How does this merger impact operations, marketing, and client management?
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"I always describe the, the audit timeline as an airplane on a runway. You know, it takes so much runway to get the airplane off the ground and into the air. Depending on the size of the airplane and how much cargo it is carrying and everything else. You only got so much runway and as you get to the end, the airplane is probably gonna either not take off or crash if you leave it too long." Kim Moore
The finer details in this episode:
- What you should do to communicate and build better relationships with your 401k auditor
- Important documentation to prepare and important discussions to have
- What to expect to avoid miscommunication
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"We listened to our customers. AuditMiner is so customer-lead. We don't develop a feature unless it's been requested by a customer and we get the customer feedback the whole time." Kelly Mann
The finer details in this episode:
- How AuditMiner came to be? What are the benefits of using AuditMiner?
- How listening to clients helped in improvements and updates
- How much time savings do clients get when using AuditMiner?
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"As long as you talk to your auditor upfront (and say), make sure they're on board, they know what they're doing. They're handling all this properly. Talk about any of these areas that may have peaked your interest that, oh, that sounds like a problem for. Talk to your auditor and do it now. Don't wait." Kim Moore
The finer details in this episode:
- Defining and understanding the SAS 136 - for plan sponsors and auditors
- Things to consider when determining what audit you need
- What you need to prepare with your service providers if you are a plan sponsor
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"Some of this we have talked about before, but what we tried to do is put together twelve (12) that we thought are important to plan sponsors and plan participants." - Kim Moore
The finer details in this episode:
- What you should consider for your 401k plan in preparation for 2022
- What you can do to take action
- Examples and reminders for plan administrations
- The importance of communication and documentation
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"We're seeing it all across different disciplines, all different types of employment and what we're finding is that people are quitting - and that really started from probably I'd say January and still continuing on through today - where they're quitting for all kinds of reasons" - Jody Grunden
The finer details of this episode
- What is "The Great Resignation"?
- What are the reasons behind this phenomenon?
- What companies can do to take the employee retention to the next level?
- Finding candidates, the evaluation process and preventing no-shows.
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
"You want to allow people to have very specific questions about their situation. Different companies have different needs. (You) Definitely want to get everybody thinking about this. So they're prepared when it's, when it's time." - Kim Moore
The finer details in this episode:
- What approach should you use? Why is a holistic approach important?
- Questions to ask your service providers to ensure you know the requirements you need to communicate
- What you need to consider before doing open enrollment
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“The pricing should be transparent. They should be able to tell you what are the factors and why is that important.” - Kim Moore
The finer details in this episode:
- Why choosing the cheaper service provider is not always better in audit
- Setting expectations and defining the value of a 401k Plan Audit
- How Summit CPA is pricing their 401k Plan audit services
- What to consider and what questions to ask auditors
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“You want to make sure that whoever is doing your audit, knows what they're doing because 401k audits are different than financial statement audits, they have certain quirks to them and your auditor needs to understand that ” - Karen Hill
The finer details in this episode:
- What considerations you need to look at other than price
- What questions to ask to CPA firms to qualify them
- What is a peer review? Why you'd want to look for a copy of this
- Client referrals and the right questions to ask them
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“It has been a challenge for me, with making sure I'm tying my numbers back and forth, navigating through our online system. We did use Advance Flow at my old job but it wasn't as detail-oriented as Summit is.” - Chasity Price
The finer details in this episode:
- Chasity and Lauren's previous job experiences
- Understanding different kinds of audits
- What working remotely is like for them and the identifying challenges of working remotely
- What are their key learning experiences with Summit CPA
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“A small investment now is definitely worth it, definitely something you would like to talk to your public supervisor about.” - Kim Moore
The finer details in this episode:
- Cyber security, 401k Plans and the government
- Importance of cyber security
- What you should watch out for to avoid cyber security attacks
- What steps you need to take to protect your business and your clients information
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“It is expected to pass in 2021, and the current expectation is that it will become effective 1/1/2022 and that's not far away....What happens when you put forward a bill like this it has an impact on the budget.” - Kim Moore
The finer details in this episode:
- Secure Act vs. Secure Act 2.0
- Deep dive on the changes in the Secure Act
- Impact of Secure Act 2.0 to 401k Plans
- What do you need to do to prepare for the new legislation?
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“You wanna find out from them what happens if I do sign with you and I stay for a while and for whatever reason I decide I wanna go somewhere else....what does that process look like? What are you gonna agree to help me with?” - Kim Moore
The finer details in this episode:
- Does your company need one?
- What to look for if you plan to hire record keepers/third party administrator services
- Things to consider when planning to switch service providers
- Choosing which service provider to work with
Episode resources
Summit CPA website - www.summitcpa.net
Email us with questions - audit@summitcpa.net
“It's not a pleasant situation. The things we are recommending are best practices anyways, you should be doing all those things we talked about not to avoid a lawsuit, but just cause it's the right thing to do and you should care about your employees.” - Kim Moore
The finer details in this episode:
- What to do when you receive a 401k Plan lawsuit
- Understanding 401k plan lawsuit statistics and using this to asses your 401k plan
- What can lawsuits cost you
- What can you do as a 401k plan sponsor to avoid lawsuits
- Main reasons of 401k related lawsuits
- Tips a 401k plan sponsor can use to stay on top of 401k plans
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“Planning as early as possible makes the whole process easier.” - Kim Moore
The finer details in this episode:
- Why planning your retirement earlier is important
- Where to start your retirement planning
- Understanding your needs and what you want to achieve for your retirement plan
- Tips on managing your retirement plan
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“Nearly 1 out of 2 American households have suffered a significant decline in their income in a time when most didn’t have sufficient emergency savings.” - David Ramirez
The finer details in this episode:
- Thoughts on COVID-19 and how it impacts the 401k space
- Communications with current and past employees due to the decline in the economy
- Things you can do to help your employees get through the current economic hardship
- Core advice for employees on their 401k plan
- Why it might not be rational for some of your employees to join your 401k plan
- Fees associated with the 401k plans
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
- For Us All - https://www.forusall.com/
- Email David - david@forusall.com
“As the employer, you have a lot of say in what happens to your employees. You hold a lot of control over an individual, and now their retirement is entrusted in you.” - Kim Moore
The finer details in this episode:
- The difference between the sponsor, trustee, and administrator
- What your responsibilities are if you are a plan sponsor, trustee, or administrator
- The different penalties or fines you could possibly face related to your 401k plan
- Areas of the 401k plan where you want to pay extra attention
- Options you have when you are facing fines
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“Often employees don’t get into a plan because they don’t know or they are scared. With auto-enrollment, they don’t have to do anything to get into a mixed investment portfolio appropriate to their age.” - Kim Moore
The finer details in this episode:
- What is auto-enrollment?
- How investments are chosen for auto-enroll plans
- Pros and cons of implementing an auto-enroll plan
- Processes for notifying employees when they are being enrolled
- Factors to consider when deciding if you should implement auto-enrollment into your 401k plan
- Possible pitfalls with auto-enrollment and how to avoid them
- The process of getting started with auto-enrollment
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“The audit is driven by the number of eligible participants in the beginning of the year. If that number is over 100, then you will need an audit.” - Kim Moore
The finer details in this episode:
- Due dates for the 5500 and the extension period
- Who can file the 5500 on your company’s behalf
- The process of filing your 5500
- The point at which you will need an audit
- Important details to review on the 5500
- The auditor’s responsibility with the 5500
- What to do if you can’t make the deadline
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“We are hearing from CPA firms that their timeframes are being compressed, and that takes away the time they would use to do the 401(k) audits.” - Kim Moore
The finer details in this episode:
- Updated tax information for 401ks
- Will there be extensions and new deadlines available?
- How the audit process is affected by an increase in remote teams
- Why you shouldn’t relax your standards
- Aspects of your 401k plan that you should check due to the pandemic
- What you can do if you have to file late
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“If the plan document says something other than what you do or meant to do, you need to get that amended to make sure your procedures follow the plan document.” - Kim Moore
The finer details in this episode:
- Common eligibility errors that companies make for employees entering the plan
- What to do with interns and seasonal employees
- How to set service requirements in your plan document
- Why you should document that you offered the plan to your employee
- How to determine if you have a fidelity bond
- What you need to know about discrimination testing
- Best practices for distributions and loans
- Disclosures that need to be distributed about your 401k plan
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“The Department of Labor and the IRS understand that errors happen, which is why they set up the voluntary correction fund.” - Kim Moore
The finer details in this episode:
- Employee compensation factors that you need to track for the 401k plan
- Why documentation of payroll changes are so important
- What to do when you didn’t withhold when you were supposed to withhold
- How to handle late contributions
- Aligning your payroll schedule with your contributions
- Maximizing your contributions for highly compensated employees
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“Make sure you are paying attention to any communication in regard to the 401k plan.” - Kim Moore
The finer details in this episode:
- What is the SAS 136 and what you need to know as a sponsor
- When this new standard goes into effect
- What you need to do in order to comply with this change
- The requirements for documentation that are now in effect
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“This is a huge opportunity as a company to help your employees to prepare for retirement.”- Kim Moore
The finer details in this episode:
- What is the SECURE Act?
- The timeline moving forward with the new law
- Statistics and reasons this act passed into law
- How this act will help you encourage your employees to prepare for retirement
- How to take advantage of this as a small company
- Benefits your business can receive from the act
- How to get your employees to participate in your plan
- Requirements you will be expected to meet
- Changes you need to know about
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“There are a lot of complexities in what drives the price for audits.”- Kim Moore
The finer details in this episode:
- The average pricing for a 401K audit and what drives the pricing
- The difference between a fixed fee audit and a “time and materials” audit
- The payment process you can expect once the fee is set
- Other factors that might make your audit more expensive than average
- How Summit CPA is able to keep their 401k pricing so low
- Common questions we get during the quoting process
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
“The most important thing for you as a sponsor is to make sure you understand your plan.” - Kyle Tanaka
The finer details in this episode:
- The process you can expect to follow with the auditing firm
- The information you will have to provide to your auditor
- How you can prepare for a 401k audit
- The importance of asking questions and keeping a dialogue with your auditor
- How to get organized before and during the audit
- Why you should always keep your payroll data
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
- AICPA - https://www.aicpa.org
- GoToMeeting - https://www.gotomeeting.com
- Smart Sheet - https://www.smartsheet.com
Tweetable: “Make sure you understand the rules. Don’t just fly by the seat of your pants because you can get in a lot of trouble.” - Kim Moore
The finer details of this episode
- When do you need to hire an auditor?
- Who’s liable for a lousy audit?
- Questions to ask during your search for an auditor.
- What is the AICPA and why it matters?
- What is the role and purpose of a fiduciary?
- A 10,000-foot view of the audit process.
- What to do if you haven’t filed.
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
- AICPA
Tweetable: “Don’t just hire the first audit firm you find. Don’t just hire the cheapest audit firm you find. Ask questions about the quality of the work they’re doing.” - Kim Moore
The finer details of this episode
- Jody’s background and how Kim took over the 401(k) audit process
- Kim’s background working in auditing
- What level of audit experience does the team have?
- The key things Kim focused on from the beginning
- How does being a “virtual” firm effect the 401(k) audit process?
- What to look for when hiring an auditor?
Episode resources
- Summit CPA website - www.summitcpa.net
- Email us with questions - audit@summitcpa.net
- AICPA
- The Summit CPA backstory (coming soon)