Audit and Assurance » Employee Benefit Plan Audit Services » Employee Benefit Plan Audit Resources for Plan Sponsors
What to Look for in an Employee Benefit Plan Audit Firm
The wrong audit firm can create filing risk, fiduciary exposure, rework, delays, and missed compliance issues. Plan sponsors should evaluate EBP audit firms based on specialization, audit volume, regulatory knowledge, communication, data security, and plan-specific experience, not fee alone.
Choosing an employee benefit plan audit firm is not just an administrative decision. For plan sponsors, it is a fiduciary decision that can affect Form 5500 filing readiness, audit quality, regulatory exposure, internal controls, and the long-term health of the plan.
Employee benefit plan audits require specialized knowledge of ERISA, Department of Labor expectations, plan operations, participant data, payroll processes, recordkeeper reporting, and financial statement requirements. A general audit firm may complete the engagement, but that does not mean it is the right fit for the plan.
LBMC created this whitepaper to help plan sponsors understand what to look for in an employee benefit plan audit firm before selecting, renewing, or replacing an auditor.
Why the right employee benefit plan audit firm matters
Employee benefit plan audits are highly specialized. They are not the same as corporate financial statement audits, and they should not be treated as a low-complexity annual requirement.
Plan sponsors rely on their audit firm to help support accurate Form 5500 reporting, review plan financial statements, evaluate plan-level activity, identify reporting issues, and communicate findings that may affect compliance or internal controls.
The wrong audit firm can create risk in several ways:
- Missed or incomplete audit procedures
- Delayed Form 5500 filing support
- Poor communication with plan sponsors and service providers
- Limited understanding of ERISA reporting requirements
- Weak review of plan operations and disclosures
- Insufficient attention to participant data and payroll processes
- Little or no practical guidance after the audit
The audit may feel complete, but that does not mean it was performed with the depth plan sponsors need.
Audit quality is not a commodity. EBP audit specialization matters.
Look for dedicated employee benefit plan audit experience
The first question plan sponsors should ask is simple: how much employee benefit plan audit work does the firm actually perform?
A firm that performs only a small number of EBP audits each year may not have the same pattern recognition, technical depth, or process discipline as a firm with a dedicated employee benefit plan audit practice.
A strong EBP audit firm should be able to speak clearly about:
- Annual employee benefit plan audit volume
- Dedicated EBP audit professionals
- Experience with 401(k), 403(b), defined benefit, ESOP, and health and welfare plans
- Form 5500 and Schedule H reporting familiarity
- ERISA Section 103(a)(3)(C) audit experience
- Current regulatory and plan reporting developments
LBMC’s employee benefit plan audit practice supports a wide range of plan types, including defined contribution plans, 401(k) plans, SEC Form 11-K filings, 403(b) plans, profit sharing plans, defined benefit plans, pension plans, money purchase pension plans, health and welfare plans, ESOPs, and Form 5500 preparation. The uploaded guide also positions LBMC as one of the largest employee benefit plan auditors in the United States.
Look beyond price when comparing audit firms
Fee matters, but it should not be the only driver. A low-cost audit may become expensive if it leads to rework, delayed filings, limited support, poor documentation, or regulatory scrutiny.
Plan sponsors should evaluate whether the audit firm can provide the right balance of technical quality, responsiveness, planning discipline, and risk insight.
Important evaluation areas include:
- Does the firm specialize in employee benefit plan audits?
- Does the firm understand the plan type and service provider structure?
- Does the audit team communicate early and clearly?
- Does the firm provide practical findings or only issue the audit report?
- Does the firm help the sponsor prepare before deadlines become urgent?
- Does the firm protect sensitive payroll, census, and participant data?
This page should not publish the full comparison worksheet. Save that for the downloadable whitepaper.
Look for strong Form 5500 and financial reporting knowledge
For many large plans, audited financial statements must be attached to Form 5500. That makes coordination between the audit, financial statements, Schedule H, and plan reporting essential.
A qualified employee benefit plan audit firm should understand how plan investments, participant loans, contributions, distributions, disclosures, and service provider information connect to financial statement reporting and Form 5500 filing requirements.
The audit firm should also understand the practical issues that commonly create filing pressure, including late documentation, incomplete census data, delayed service provider reports, participant count changes, and plan amendments that have not been fully organized.
A technically strong audit firm helps reduce filing risk by identifying documentation and reporting issues early.
Look for ERISA and regulatory awareness
Employee benefit plan audits sit inside a regulatory environment. Plan sponsors need an audit firm that understands not only accounting standards, but also the ERISA and Department of Labor context around the plan.
A strong EBP audit firm should be able to discuss:
- ERISA reporting expectations
- DOL audit quality concerns
- Participant count thresholds
- The 80–120 participant rule
- Timely deposit requirements
- Late participant deferral considerations
- Plan document and amendment alignment
- Correction considerations when issues are identified
The LBMC guide notes that late participant deferrals remain one of the most scrutinized enforcement areas and that delays may be classified as prohibited transactions requiring correction.
This is exactly why the audit firm matters. A plan sponsor does not just need a report. It needs an audit team that understands where risk shows up.
Look for clear communication before, during, and after the audit
A strong audit process should not feel chaotic. Plan sponsors should know what will be requested, when it will be requested, who needs to be involved, and how issues will be communicated.
Before selecting or renewing an audit firm, ask how the firm manages:
- Audit planning and kickoff
- Document requests
- Coordination with payroll providers, TPAs, recordkeepers, and advisors
- Status updates
- Issue escalation
- Management letters and recommendations
- Post-audit improvement discussions
A quality audit process should result in more than the delivery of audited financial statements. It should also provide communication around operational findings, recommendations for improving internal controls, and guidance on correcting identified issues.
Look for data security and participant information controls
Employee benefit plan audits often require access to sensitive participant data, payroll information, census files, loan information, contribution records, and service provider reports. That makes data protection a serious governance issue.
Plan sponsors should ask how the audit firm protects sensitive information, manages secure file sharing, controls access permissions, and handles data across the audit team.
This should be part of the evaluation process, not an afterthought.
Cybersecurity oversight is now a governance expectation, not a technical detail.
Look for a firm that can support long-term plan health
A valuable employee benefit plan audit firm does not simply complete the audit and disappear. The right firm helps plan sponsors understand recurring issues, strengthen internal controls, prepare for future filings, and improve the audit process over time.
Plan sponsors should expect their audit firm to help identify practical opportunities to improve:
- Plan documentation
- Internal controls
- Timely contribution processes
- Service provider coordination
- Record retention
- Committee oversight
- Audit readiness
- Form 5500 support
The objective is not just compliance. It is protecting the long-term integrity of the plan.
Why plan sponsors choose LBMC for employee benefit plan audits
LBMC brings deep specialization to employee benefit plan audits. Our team works with a wide range of plans, including 401(k), 403(b), defined benefit, pension, ESOP, health and welfare, and profit sharing plans.
Because employee benefit plan audits are a dedicated focus area, LBMC helps plan sponsors manage the audit process with more structure, clearer communication, and practical insight into common documentation, reporting, and compliance issues.
Plan sponsors choose LBMC for:
- Dedicated employee benefit plan audit experience
- Large-volume EBP audit specialization
- Knowledge of Form 5500 and plan reporting requirements
- Experience across multiple plan types
- Practical communication throughout the audit process
- Risk-focused recommendations that support better plan governance
Download the full whitepaper
This page provides a high-level overview of what plan sponsors should look for in an employee benefit plan audit firm. For the full evaluation framework, download LBMC’s whitepaper.
The full whitepaper can help your team compare audit firms, evaluate your current auditor, identify red flags, and prepare for a more informed fiduciary committee or leadership discussion.
Get the full whitepaper to help your organization evaluate employee benefit plan audit firms and understand the audit quality factors that matter most for plan sponsors.
Should plan sponsors choose an EBP audit firm based on price?
Price should be considered, but it should not be the only factor. A low-cost audit may create greater risk if the firm lacks EBP specialization, provides limited communication, misses reporting issues, or does not help the sponsor prepare for Form 5500 filing requirements.
Can LBMC help evaluate our current employee benefit plan audit process?
Yes. LBMC can help plan sponsors review their current audit approach, identify potential risk areas, evaluate audit readiness, and determine whether the current process supports the plan’s reporting, compliance, and fiduciary responsibilities.
What should plan sponsors look for in an employee benefit plan auditor?
Plan sponsors should evaluate audit volume, EBP specialization, professional oversight, regulatory knowledge, Form 5500 experience, ERISA knowledge, cybersecurity controls, communication quality, and whether the firm provides practical recommendations beyond minimum compliance.
Explore Employee Benefit Plan Audit Resources
Access LBMC’s guides, whitepapers, and checklists for plan sponsors preparing for employee benefit plan audits, Form 5500 filing, 401(k) compliance, auditor selection, and audit readiness.