Welcome to an ERISA sunscreen moment! Today’s ERISA Sunscreen Moment deals with a newly effective auditing standard, issued by the PCAOB, which affects a public company’s Form 11-K filing with the SEC. For audits of 11-K engagements for fiscal years beginning on or after December 15, 2012, PCAOB Auditing Standard No. 16 requires auditors to communicate certain matters to the Plan’s audit committee prior to the issuance of the auditor’s report.

Required communications cover such areas as:

  • Auditor appointment and retention
  • Overall audit strategy, including the timing of the audit and significant risks related to the audit
  • The results of the audit, which includes a host of other topical communications
  • Various other matters regarding the conduct of the audit

These communications can be made orally or in writing, unless otherwise specified.  If the communications are made orally, the auditor must document the communications in the working papers. Auditing Standard 16 is public information and can be found on the PCAOB’s website at www.pcaobus.org. Plan sponsors with 11-K filings are well served to discuss this newly effective standard with their auditor to ensure that compliance occurs prior to the release of the audit opinion. Evaluating the content of this information is also a best practice. This has been a sunscreen moment. Use it, and don’t get burned.