Plan sponsors with 100 or more eligible participants are required by ERISA to have their 401(k) plan independently audited and to attach the audit report to Form 5500. Summit Advisory performs these engagements with the technical precision your plan participants and the DOL require.
Get a Free ConsultationWhy 401(k) Plans Get Audited
Under the Employee Retirement Income Security Act (ERISA), any 401(k) plan with 100 or more eligible participants at the beginning of a plan year must include an independent audit report with its Form 5500 annual filing submitted to the Department of Labor (DOL).
The audit examines whether the plan's financial statements fairly present net assets available for benefits, confirms that participant contributions were timely remitted, verifies that distributions were made to eligible participants in proper amounts, and assesses the accuracy of plan administrative operations.
Failure to include an adequate audit report with Form 5500 can result in DOL rejection of the filing, potential civil penalties, and plan disqualification — all of which directly affect your employees' retirement security.
Schedule Your Plan AuditRequired to file Form 5500 with an independent CPA audit report attached. Applies to 401(k), profit sharing, and most defined contribution plans.
Generally exempt from the audit requirement if they meet the small plan exemption conditions. May file Form 5500-SF without an audit.
Plans with between 80 and 120 participants at the start of the plan year may elect to file under the same category (large or small) as the prior year's filing.
Our Services
Summit Advisory performs full-scope and limited-scope 401(k) plan audits under GAAS and ERISA requirements, delivering timely reports that satisfy DOL and Form 5500 filing requirements.
Complete GAAS-compliant audit of plan financial statements including participant data, investment balances, contributions, distributions, and administrative expenses — resulting in an independent auditor's report for Form 5500 attachment.
When plan investment information is certified by a qualifying bank or insurance carrier, a limited-scope audit may be performed. We issue the appropriate limited-scope report and guide you through the certification requirements.
Verification that employee and employer contributions were remitted to the plan in a timely manner per DOL remittance rules — one of the most common deficiencies identified in DOL plan investigations.
Testing of participant eligibility determinations, vesting schedules, and benefit calculations to confirm that the plan is being administered in accordance with plan documents and ERISA requirements.
Verification of participant distributions, rollovers, hardship withdrawals, and outstanding loan balances — ensuring amounts are accurate and payments were made to eligible participants under plan terms.
We coordinate directly with your plan administrator and TPA to ensure our audit report aligns with your Form 5500 schedules and financial statements, enabling a timely, accurate filing with the DOL.
Our Process
We gather plan documents, prior 5500 filings, trust statements, and participant data to define audit scope, risk areas, and a timeline aligned with your filing deadline.
We verify investment balances, confirm trust account reconciliations, and assess the completeness of plan financial statement disclosures.
We test contributions, distributions, loans, and vesting for a sample of participants — confirming plan administration matches plan documents and ERISA requirements.
We issue the audit report and coordinate with your plan administrator to ensure Form 5500 is complete and filed by the July 31 deadline (or October 15 with extension).
FAQ
Form 5500 is generally due 7 months after the plan year end — July 31 for calendar-year plans. A 2.5-month extension is available (October 15), giving the audit sufficient time to complete before filing.
The DOL can reject the Form 5500 filing as deficient, resulting in penalties of up to $250 per day (up to $150,000 per plan year). Repeat or willful failures can lead to additional civil penalties and plan disqualification.
Yes, if your plan's investment information is certified by a bank or insurance carrier that meets DOL requirements. We'll confirm your plan's eligibility for a limited-scope audit during the initial consultation.
Most 401(k) plan audits take 4-8 weeks depending on plan complexity and the completeness of records provided. Starting early — ideally 10+ weeks before your filing deadline — provides adequate time for fieldwork and revisions.