401(k) Audit & Employee Benefit Plan Audit Services: What You Need to Know
As companies grow and expand their workforce, offering a 401(k) retirement plan becomes both a benefit and a fiduciary responsibility. If your company’s plan reaches certain thresholds, a 401(k) audit — or broader Employee Benefit Plan (EBP) audit — becomes not just advisable, but mandatory. This article provides an overview of these audits and the services available to support compliance and financial integrity.
What Is a 401(k) Audit?
A 401(k) audit is an independent examination of your retirement plan’s financial statements, processes, and compliance with federal regulations — particularly the Employee Retirement Income Security Act (ERISA) and Department of Labor (DOL) requirements.
These audits typically apply to “large plans,” which are defined as those with 100 or more participants with account balances at the start of the plan year.
When Is a 401(k) Audit Required?
A 401(k) audit is required when:
- The plan has 100 or more eligible participants with balances (per the 2023 rule update).
- You file Form 5500 as a “large plan.”
- You do not qualify under the 80/120 participant rule (which allows small-plan treatment for plans with up to 120 participants under specific conditions).
What Is an Employee Benefit Plan (EBP) Audit?
An EBP audit refers to the examination of various types of employee benefit plans, not just 401(k)s. These can include:
- 403(b) plans
- Pension plans
- Profit-sharing plans
- Health and welfare benefit plans
These audits verify the financial integrity of the plan and ensure that participant contributions are handled properly, investments are reported accurately, and the plan complies with all relevant regulations.
What Do 401(k) Audit & EBP Audit Services Include?
Professional audit firms that offer 401(k) and EBP audit services typically provide:
Pre-audit consulting: Reviewing your current processes, helping gather documents, and identifying potential red flags.
Plan document and compliance testing: Ensuring that your plan adheres to its own rules, as well as DOL and IRS regulations.
Contribution and distribution testing: Verifying the timeliness and accuracy of deposits, matches, loans, and distributions.
Audit report preparation: Issuing an opinion letter and report to accompany your Form 5500 filing.
Ongoing support: Helping you correct operational errors, respond to DOL inquiries, and improve internal controls.
Why These Audits Matter
Failing to perform a required audit — or hiring an inexperienced auditor — can result in:
- Form 5500 rejection
- Fines and penalties from the DOL or IRS
- Loss of participant confidence
- Increased fiduciary liability
Choosing a qualified audit provider helps protect both your organization and your employees’ retirement future.
Choosing the Right Audit Partner
When selecting a provider for 401(k) or EBP audit services, look for:
Experience with ERISA audits
CPA firms that perform a high volume of EBP audits annually
Firms listed in the DOL’s EFAST2 approved auditor database
Transparent pricing and timeline
Always confirm 401k audit pricing details before engaging an audit firm to ensure full transparency.
A consultative approach that improves your plan operations, not just checks the boxes
A 401(k) or employee benefit plan audit isn’t just about compliance — it’s about accountability, financial stewardship, and long-term trust. Partnering with a knowledgeable, experienced audit firm ensures that your company meets its regulatory obligations while building a strong foundation for employee financial wellness.