Audits of 401(k) Plans

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• Chapter 1 1-1Introduction and Background 1-1Background information 1-3Operation and administration 1-6Accounting records 1-8Reporting standards 1-10Governmental regulations 1-11Audit requirements 1-12Reporting and disclosure requirements under ERISA 1-16SEC Form 11-K filing requirements 1-17ERISA limited-scope audits 1-19Chapter 2 2-1Planning 2-1Pre-engagement activities 2-3Audit planning 2-6Communication and coordination 2-10Understanding the plan and its environment, including its internal control 2-11Audit documentation 2-13Preliminary analytical review procedures 2-14Audit risk factors 2-15Internal control structure 2-21Consideration of fraud 2-22Plan’s use of third-party service organizations 2-29Party in interest transactions 2-30Plan’s use of voice response or internet recordkeeping system 2-32Accounting estimates 2-33Going concern considerations 2-34Chapter 3 3-1Internal Control Structure 3-1Understanding internal control 3-4The components of internal control 3-6Acquiring knowledge of the controls 3-9Assessing control risk 3-10Plan’s use of third-party service organizations 3-11Plan’s use of voice response and internet-based recordkeeping systems 3-16Documentation 3-17Communicating control deficiencies 3-18Chapter 4 4-1Auditing the Statement of Net Assets Available for Benefits 4-1Accounting guidance 4-3Listing of investments 4-4Valuation of investments 4-5Investment options 4-6Audit objectives 4-8Audit procedures 4-9Investments in master trusts and similar vehicles 4-11Investments in registered investment companies (mutual funds) and common or commingled trust funds 4-13Investments with insurance companies 4-15Direct filing entities (DFE) 4-20Other investments 4-21ERISA limited-scope auditing procedures 4-24Contributions receivable 4-26Notes receivable from participants receivable 4-27Cash balances 4-29Other assets 4-30Accrued liabilities 4-31Chapter 5 5-1Auditing the Statement of Changes in Net Assets Available for Benefits 5-1Investment income 5-3ERISA limited-scope audit 5-7Investment expenses 5-8Contributions from employers 5-9Individual participant accounts 5-12Participant eligibility 5-17Contributions from other identified sources 5-18Withdrawals 5-19Loans 5-20Administrative expenses 5-22Chapter 6 6-1Other Auditing Considerations 6-1Plan tax status 6-2Testing for discrimination 6-7Consequences of violations 6-8Failure to pass nondiscrimination tests 6-9Commitments and contingencies 6-10Subsequent events 6-12Representations from plan management 6-14Illustrative attachment to management representation letter 6-18Form 5500 and supplemental schedules 6-21Information for supplemental schedules from trustee or custodian 6-28Terminating plans 6-32Plan mergers 6-35Party in interest transactions 6-36Initial audit of the 401(k) plan 6-41Form 11-K: The Sarbanes-Oxley Act of 2002 6-44Communication with those charged with governance 6-47Chapter 7 7-1The Auditor’s Report and Financial Statement Disclosures 7-1The auditor’s report 7-4Standard report 7-7Additional communications: Emphasis-of-matter and other-matter paragraphs 7-10Modified reports 7-12Non-GAAP basis financial statements 7-14Reports filed pursuant to the SEC Form 11-K 7-16ERISA limited-scope reports 7-21Financial statement disclosures 7-24Appendix A A-1ERISA and Related Regulations A-1Appendix A A-3Glossary Glossary 1Index Index 1Solutions Solutions 1Chapter 1 Solutions 1Chapter 2 Solutions 4Chapter 3 Solutions 6Chapter 4 Solutions 8Chapter 5 Solutions 10Chapter 6 Solutions 12Chapter 7 Solutions 17