CEBS GBA/RPA3 - Module 5 - Overseeing and Managing Plan Audits Questions & Answerrs 100% Correct!!
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CEBS GBA/RPA3 - Module 5 - O
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CEBS GBA/RPA3 - Module 5 - O
A plan administrator who is seeking to engage a well-qualified auditor will focus all discussions to matters specific to their own plan(s). To encourage a productive discussion, the plan administrator should provide a potential audit firm with a number of items. List these items. - ANSWERa. Plan do...
CEBS GBA/RPA3 - Module 5 - Overseeing and
Managing Plan Audits Questions & Answerrs
100% Correct!!
A plan administrator who is seeking to engage a well-qualified auditor will focus all discussions to
matters specific to their own plan(s). To encourage a productive discussion, the plan administrator
should provide a potential audit firm with a number of items. List these items. - ANSWERa. Plan
documents or SPD
b. Prior year Form 5500 and audited financial statements (including who prepares the statements)
c. Scope of the audit (full or limited scope, especially if a change in scope is possible)
d. List of external service providers (such as investment trustee, recordkeeper or actuary, ERISA
attorney, and payroll processor)
e. Summary of changes in plan provisions and/or service providers
f. Summary of any plan corrections or issues encountered for the year to be audited
g. Information regarding access to prior year audit work papers
A limited scope audit is now called an ERISA Section 103(a)(3)(c) audit and must conform to the
standards established by Statement on Auditing Standards No. 136.
ACFE has identified company departments where fraud is (a) most likely and (b) least likely to occur.
What are these departments? - ANSWERa. Accounting, operations, and upper management tend to
be the most frequent departments where fraudulent activity occurs
b. Human resources, boards of directors, and legal are three of the departments where fraud
occurrences are low.
ACFE has identified several measures an organization can take to deter and minimize fraud. Briefly
describe these measures. - ANSWERACFE studies indicate that whistleblower hotlines are the most
effective fraud detection tool available. Successful hotlines include provisions for anonymity and
strong antiretaliation policies.
, Employee support programs are effective because they provide employees with psychiatric and
credit counseling at a time when they are most needed - before they commit fraud. Also, these
programs help redirect employee efforts to more productive solutions to their problems.
Codes of ethics and ethics training session reduce fraud losses, and they serve critical roles in helping
to investigate fraud cases.
Another measure an organization can take is to make sure all employees understand what
constitutes fraud and to communicate that a zero-tolerance policy exists in the company. Publicize
any prior frauds that have occurred and the impact to the company of those frauds, such as lost
profits, adverse publicity, and lost jobs. Employees should be trained to recognize the warning signs
that, when combined with other factors, indicate fraud.
Although ASC Topic 960 does not identify any one group as the primary users of plan financial
statements, the content of plan financial statements should focus on the needs of one group. Which
group is this, and why are its needs paramount? - ANSWERThe content of plan financial statements
should focus on the needs of plan participants because pension plans exist primarily for their benefit.
However, plan financial statements should be useful to others who have any of the following
characteristics:
a. Advise or represent participants
b. Are current or potential investors or creditors of the employer
c. Are responsible for funding the plan
d. For other reasons have a derived or indirect interest in the status of the plan.
An audit engagement letter should detail the responsibilities of the plan auditor. What are these
responsibilities? - ANSWERa. Conducting the audit in accordance with GAAS
b. Obtaining reasonable rather than absolute assurance about whether the financial statements are
free of material misstatement, whether caused by error or fraud
c. Obtaining an understanding of the plan and its environment, including its internal controls,
sufficient to assess the risks of material misstatement of the financial statements and to design the
nature, timing, and extent of further audit procedures
d. The expression of an opinion on the plan's financial statements
An audit engagement letter should include a list of responsibilities of plan management. What are
these reponsibilities? - ANSWERa. Understanding the objective of the audit
b. The plan's financial statements and the selection and application of the accounting policies
c. Establishing and maintaining effective internal control over financial reporting
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