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Audit Risk Alert: Employee Benefit Plans Industry Developments, 2018

Audit Risk Alert: Employee Benefit Plans Industry Developments, 2018


ISBN: 978-1-948-30632-4

May 2018

80 pages



Developed by a task force consisting of current and former employee benefit plan expert panel members, this alert offers a range of topics such as master trust reporting, cybersecurity, new proposed auditor's reports, electronic information, limited-scope certification, and new auditing standards such as PCAOB AS 3101.

The increasing complexity of employee benefit plan auditing and increased focus by the DOL have resulted in significant pressure for CPAs and firms performing EBP audits. To help accountants meet the challenge of performing quality audits in this unique and complex area, the AICPA has developed this alert to assist them in identifying current sources of risk within EBP audit engagements. Accountants will find a targeted discussion on new developments, issues auditors may face in their current audits, as well as a look at what's in the pipeline that may affect your engagements.

Key benefits of this work include:

  • Coverage of emerging practice issues, including direct versus indirect investment in fully benefit-responsive investment contracts, readily determinable fair value, disclosures for investments in certain entities that calculate NAV per share (or its equivalent), plan expenses, and repurchase agreements
  • An in-depth look at master trust reporting, electronic information and the new PCAOB auditing standard AS 3101
  • Analysis of high risk areas specific to defined benefit pension plans, such as pension benefit guaranty corporation premiums and reporting, demographic and economic assumptions, and pension risk management
  • Current developments on health and welfare plans, including health care reform and its effect on employee benefit plans
  • Up-to-date information on regulatory development from both the DOL and IRS


Employee Benefit Plans Industry Developments—2018 .01-.191

How This Alert Helps You .01-.03

Economic and Industry Developments .04-.09

The Current Economy .04-.09

Hot Topics .10-.20

Cybersecurity .10-.15

Auditing Standards Board Employee Benefit Plan Auditor Reporting Project .16-.20

Accounting Issues and Developments .21-.37

Direct Versus Indirect Investment in Fully Benefit-Responsive Investment Contracts .21

Readily Determinable Fair Value .22-.24

ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) .25-.29

Disclosures When a New FASB Codification Update Is Issued .30-.31

ASU No. 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting
(A Consensus of the Emerging Issues Task Force) .32-.37

Auditing Issues and Developments .38 50

Plan Sponsor System-Generated Information and Reports .38-.43

Use of Outside Service Provider System-Generated Information and Reports .44-.46

Trends in Legal Action .47-.50

Employee Benefit Plan Guide Update .51

Form 11-K Filers .52-.62

PCAOB AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion .52-.61

Other Amendments to PCAOB Standards .62

Auditing Interpretation No. 4 to AU-C Section .700-.63

Defined Benefit Pension Plans .64-.83

IRS Mortality Assumption Changes .65-.70

FASB ASC 960 Expected Long-Term Rate of Return .71-.76

Continued Adoption of Cash Balance Plans .77-.79

PBGC Premiums .80-.83

Health and Welfare Benefit Plans .84-.102

Economic and Demographic Assumptions .85-.98

Employee Benefit Plans Industry Developments—2018—continued Other Assumptions .99

Retiree Reimbursement Account or Arrangement .100-.102

Audit Quality 103-.118

AICPA Peer Review Enhanced Oversight Program—Findings.That Led to Nonconforming Engagements .103-.108

Preparing for Peer Review .109-.113

Tools to Further Audit Quality .114-.118

Recent Pronouncements .119-.123

Recent Auditing and Attestation Pronouncements and Related Guidance .120

Recent Accounting Standards Updates .121

Recently Issued Technical Questions and Answers .122-.123

Regulatory Developments—DOL .124-.129

2017 Form 5500 Annual Report .124

The DOL Extends Transition Period for Fiduciary Rule Exemptions .125-.129

Regulatory Developments—IRS .130-.162

IRS Announces 2018 Pension Plan Limitations; 401(k) Contribution Limit Increases to $18,500 for 2018 .130-.133

Mortality Tables for Pension Plans Updated for 2018 .134-.136

Disaster Tax Relief for Retirement Plans 137-.138

Retirement Plans Can Make Loans and Hardship Distributions to Victims of Hurricanes Maria, Irma, and Harvey.139-.143

IRS Updates Procedures for Issuing Opinions on Preapproved Plans .144

IRS Issues New Guidance on Hardships .145-.150

Required Amendments from the IRS .151-.152

Tax Reform’s Effect on ESOPs .153-.154

PBGC Expanded Missing Participants Program .155-.159

IRS Extends Relief to Frozen Defined Benefit Pension Plans .160-.162

Regulatory Developments—Multiemployer Plans .163-.165

Multiemployer Pension Reform Act of 2014 Benefit Suspension .163-.165

On the Horizon .166-.170

Auditing and Attest Pipeline .168

Independence and Ethics Pipeline .169-.170

Employee Benefit Plan Resources .171-.189

Employee Benefit Plan Audit Certificate Programs .172-.173

Publications .174

Continuing Professional Education .175-.176

Webcasts .177

Member Service Center .178

Employee Benefit Plans Industry Developments—2018—continued Hotlines .179-.180

Online Professional Library: Accounting and Auditing Literature .181

Codified Clarity Standards .182-.184

Financial Reporting Center of .185-.187

Industry Conferences .188-.189

Appendix A—Additional Internet Resources .190

Appendix B—Health and Welfare Plans .191