[经管营销]Chapter34AuditingEmployeeBenefitPlans.doc

窗体底部34 Auditing Employee Benefit Plans 34.1 FINANCIAL STATEMENTS AND ACCOUNTING METHODS 34.2 AUDITING PLAN ASSETS, LIABILITIES, REVENUES, AND EXPENSES (a) Scope of Services,(b) Contributions, (i) Accounting Principles,(ii) Controls,(iii) Audit Objectives and Procedures,(iv) Employer Records, (c) Investments, (i) Accounting Principles,(ii) Controls,(iii) Audit Objectives and Procedures,(iv) Funding Arrangements Used by Employee Benefit Plans, (d) Custodial Relationships, (i) Trust Arrangements,(ii) Common or Commingled Trust Funds,(iii) Master Trusts, (e) Contracts with Insurance Companies, (i) Accounting Principles,(ii) Controls,(iii) Audit Objectives and Procedures,(iv) Separate Accounts,(v) Deposit Administration Group Annuity and Immediate Participation Guarantee Contracts, (f) Deposits with and Receivables from Insurance Companies,(g) Other Assets,(h) Liabilities,(i) Benefit Payments, (i) Controls,(ii) Audit Objectives and Procedures, (j) Administrative Expenses, (i) Accounting Principles,(ii) Controls,(iii) Audit Objectives and Procedures, 34.3 AUDITING BENEFIT INFORMATION (a) Pension Plans, (i) Background and Requirements,(ii) Audit Objectives and Procedures, (b) Health and Welfare Plans, (i) Accounting Principles,(ii) Audit Objectives and Procedures,(iii) Claims Payable and Claims Incurred But Not Reported,(iv) Premiums Due Under Insurance Arrangements,(v) Accumulated Eligibility Credits,(vi) Postretirement Benefits,(vii) Nonenforcement Policy for Multiemployer Health and Welfare Plans, 34.4 AUDITING OTHER FINANCIAL STATEMENT DISCLOSURES (a) Requirements,(b) Auditing Procedures, 34.5 OTHER AUDIT CONSIDERATIONS (a) Subsequent Events,(b) Audit Requirements Relating to ERISA, (i) Plan Compliance with ERISA,(ii) Transactions Prohibited by ERISA,(iii) Reporting and Disclosure Requirements of ERISA,(iv) Supplemental Schedules, (c) Other Considerations, (i) Bonding,(ii) Transaction Approval,(iii) Potential Plan Termination,(iv) Letter of Representation and Legal Counsel Letters, 34.6 AUDIT REPORTS (a) Standard Report, (i) Reporting on Supplemental Schedules Required by ERISA, (b) Departures from the Standard Report, (i) Limited-Scope Audit Pursuant to DOL Regulations,(ii) Scope Limitation Relating to Employer Records, Employee benefit plans comprise pension plans and health and welfare plans. They operate by investing contributions of sponsors and employees in income-producing assets, which, together with the income thereon, are intended to be used to pay benefits to plan participants. Pension plans provide benefits to retired employees or their beneficiaries. Health and welfare plans provide benefits to current employees and their dependents, to retired employees and their dependents, or to both. Those benefits may include: Medical, dental, visual, psychiatric, or long-term health care Life insurance Accidental death or dismemberment benefits Unemployment, disability, vacation, or holiday benefits Apprenticeships, tuition assistance, dependent care, housing subsidies, or legal services Employee benefit plans may be funded (e.g., the employer may establish a trust to hold assets that will be used to pay all or part of the covered benefits) or they may be unfunded (i.e., benefits are paid from the general assets of the employer). Most pension plans are funded, but health and welfare plans are often unfunded. Some employee benefit plans are insured plans, meaning that all or a portion of the benefits are provided through insurance contracts entered into by the employer. In recent years, employee benefit plans have taken on increased importance and also have become more complex as a result of changes in legislation, concern over the costs involved, and heightened awareness of the significance of such plans on the part of participants, particularly in situations where plans are underfunded (i.e., the plans net assets available for benefits are less than the promised benefits). An employee benefit plan is established and maintained pursuant to a plan instrument that specifies the plans provisions. In a defined benefit plan, benefits are determined in advance by a fixed formula that usually is related to the employees compensation, years of service, or both. Actuarial calculations are used to establish the amount of contributions required to meet those benefits. In a defined contribution plan, amounts are contributed to the individual account of each participant, and benefits are based solely on the accumulated contributions and income thereon. The plan must provide for the allocation of plan earnings and losses, and, in some plans, forfeitures, to participants accounts. Employee benefit plans may be single employer plans (i.e., sponsored by one entity) or multiemployer plans, which are sponsored by several entities under, for example, a collective bargaining agreement. Many defined contribution plans are contributory; that is, the participants bear part of the cost. Most defined benefit pension plans are noncontributory. 34.1 FINANCIAL STATEMENTS AND ACCOUNTING METHODSBefore 1975, relatively little attention was given to preparing financial statements for employee benefit plans, and those statements rarely were examined by independent auditors. Passage by Congress of the Employee Retirement Income Security Act of 1974 (ERISA) created a new era in benefit plan accounting, financial reporting, and audits; it also expanded significantly the governments involvement in the design, operations, and reporting of benefit plans. ERISA requires those plans to file an annual report (Form 5500) with government agencies, including, with a few exceptions (noted later), financial statements and certain supplemental schedules. In addition, depending on the number of plan participants, an audit of the statements and schedules may be required to be performed by an independent certified public accountant. Generally, health and welfare plans are subject to the reporting and disclosure requirements of ERISA, including filing annual reports on Form 5500. However, health and welfare plans that are unfunded, fully insured, or a combination of the two are not required to submit financial statements with the annual filings. If a separate trust has been established to hold assets for payment of covered benefits and the plan has more than 100 participants, audited financial statements generally are required to be included in the annual filing with ERISA. The absence, at the time ERISA was enacted, of authoritative accounting pronouncements addressing benefit plan accounting and financial reporting requirements, coupled with auditors limited experience with benefit plans and the minimal guidance initially provided by ERISA, created serious problems for auditors. The Financial Accounting Standards Board (FASB) and the AICPA have since issued standards, and the Department of Labor (DOL) has issued regulations, providing guidance on accounting and reporting matters, prescribing minimum disclosures, and reducing the confusion regarding audits of plans. Statement of Financial Accounting Standards (SFAS) No. 35, Accounting and Reporting by Defined Benefit Pension Plans, as amended by SFAS No. 110, Reporting by Defined Benefit Pension Plans of Investment Contracts (Accounting Standards Section Pe5), is the authoritative pronouncement on accounting principles and financial reporting standards for defined benefit pension plans; it reduced the options previously available to such plans. SFAS No. 35 applies both to plans covered by ERISA and to those that are not. In addition, the AICPA issued Statement of Position (SOP) 99-2, Accounting for and Reporting of Postretirement Medical (401(h) Features of Defined Benefit Pension Plans, which establishes accounting and reporting requirements for retiree medical accounts in a defined benefit pension plan and related health and welfare plans. Accounting and reporting guidance for defined contribution pension plans is set forth in the AICPA audit and accounting guide, Audits of Employee Benefit Plans (the audit guide), discussed in the main volume, and in SOP 99-3, Accounting for and Reporting of Certain Defined Contribution Benefit Plan Investments and Other Disclosure Matters. Guidance for health and welfare benefit plans is contained in SOP 92-6, Accounting and Reporting by Health and Welfare Benefit Plans (also incorporated in Chapter 4 of the audit guide). SOP 94-4, Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans, adds to the literature. Although the discussion of nonpension benefit plans in this chapter is principally in the context of plans providing health care benefits, it applies also to plans that provide other types of benefits, with appropriate modification of auditing procedures to fit the engagement circumstances.The audit guide was issued originally in 1983 and revised most recently in 2000. It is updated periodically to reflect additional accounting and auditing requirements, clarify requirements, and incorporate new professional standards; it discusses both defined benefit and defined contribution pension and health and welfare plans. The auditor of an employee benefit plan should be familiar with the provisions of the audit guide, the accounting pronouncements discussed above, and relevant government regulations, as well as the instructions to the ERISA reporting forms.1The audit guide notes that the primary objective of an employee benefit plans financial statements-both pension and health and welfare, both defined benefit and defined contribution-is to provide financial information that is useful in assessing the plans present and future ability to pay benefits when they come due. This objective recognizes that plan financial statements should address the needs of plan participants, because the plans exist primarily for their benefit. Those needs entail principally assessing the performance of plan administrators and other fiduciaries in managing plan assets. Accordingly, the plan rather than the trust holding the assets is the reporting entity. To accomplish that objective, a pension plans annual financial statements should include: A statement of net assets available for benefits as of the end of the plan year A statement of changes in net assets available for benefits for the year then ended For a defined benefit plan, information regarding the actuarial present value of accumulated plan benefits as of either the beginning or end of the plan year For a defined benefit plan, information regarding the effects, if significant, of certain factors on the year-to-year change in the actuarial present value of accumulated plan benefits A health and welfare plans financial statements should include: A statement of net assets available for benefits as of the end of the plan year A statement of changes in net assets available for benefits for the year then ended For a defined benefit plan, information regarding the plans benefit obligations as of the end of the plan year, presented as a separate statement or included on another financial statement For a defined benefit plan, information regarding the effects, if significant, of certain factors on the year-to-year change in the plans benefit obligations, presented as a separate statement or included on one of the other financial statements Information concerning benefit obligations is not applicable to defined contribution pension or health and welfare plans because under this type of plan the plans obligation is limited to the amounts that have accumulated in each participants account. Under both SFAS No. 35 and SOP 92-6, plan benefits or benefit obligations of defined benefit plans and the related activity are excluded and separately presented from the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits, respectively. Information about benefit obligations of defined benefit health and welfare plans should include the following: Claims payable and currently due Premiums due under insurance arrangements Claims incurred but not reported to the plan Accumulated eligibility credits for active participants Postretirement benefits for participants and their beneficiaries and covered dependents The statement of net assets available for benefits should be presented in enough detail to allow users to identify which of the plans resources are available for benefits. Generally, all assets (except certain contracts with insurance companies) are presented at fair value. Similarly, the statement of changes in net assets available for benefits should contain sufficient detail to enable significant changes in net assets during the year to be identified. Paragraph 15 of SFAS No. 35 specifies the minimum disclosure requirements for information regarding changes in net assets available for benefits under pension plans. The requirements are the same for health and welfare plans, under SOP 92-6. SFAS No. 102, Statement of Cash Flows-Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale (Accounting Standards Section Pe5), provides an exemption from presenting a statement of cash flows for defined benefit pension plans and certain other employee benefit plans. This statement formalized what generally had been followed in practice prior to its issuance. Accumulated plan benefits of participants of defined benefit pension plans are required to be shown at the present value of the future benefit payments attributable under the plans provisions to employees service rendered to the date of the actuarial valuation (discussed further in Section 3, Auditing Benefit Information). Disclosure of the actuarial present value of accumulated plan benefits (which can be made in the financial statements or accompanying notes) should be segmented into at least the following categories: Vested benefits of participants currently receiving payments Other vested benefits Nonvested benefits Current employees accumulated contributions to a defined benefit pension plan as of the benefit valuation date (including interest, if any) also should be disclosed. The actuarial benefit calculations as of the end of the most recent plan year may not be completed at the time the financial statements are prepared; accordingly, often the actuarial present value of accumulated plan benefits is presented as of the beginning of the year. In these circumstances, a comparative statement of net assets available for benefits as of the beginning and end of the current year, comparative statements of changes in net assets available for benefits for the preceding and current plan years, and information regarding changes in the actuarial present value of accumulated plan benefits also should be presented. Disclosures for a defined contribution pension plan, which are similar to those for a defined benefit plan, are contained in the audit guide. In March 2000, the AICPA issued a proposed statement of position, Accounting for and Reporting of Certain Health and Welfare Benefit Plan Transactions, that would amend the audit guide and SOP 92-6. The proposed SOP was developed because many employers recently have amended their plans to reduce benefits, introduce cost-sharing arrangements, or both. To the extent that cost sharing has been introduced or increased, the total cost of benefits has remained essentially the same, whereas the portion paid by the plan sponsor has decreased. Such benefit reductions and cost-sharing arrangements were not prevalent when SOP 92-6 was issued, and thus they were not addressed in that SOP. In addition, there has been confusion among preparers and auditors in understanding and implementing some of the requirements of SOP 92-6. If adopted in its current form, the proposed SOP would revise standards for measuring, reporting, and disclosing estimated future postretirement benefit payments to be funded partially or entirely by plan participants, specify the presentation requirements for benefit obligation information, set forth requirements for accounting for and reporting of postemployment benefits, clarify the measurement date for benefit obligations, and require the identification of investments that are 5 percent or more of net assets available for benefits. 34.2 AUDITING PLAN ASSETS, LIABILITIES, REVENUES, AND EXPENSES The audit strategy for an employee benefit plan varies depending on the nature and operation of the plan as well as the scope of services to be performed (discussed below). If the plans auditor is also the auditor of the sponsoring entity, many of the auditing procedures discussed below will be performed as part of the audit of the sponsors statements; those procedures need not be repeated in auditing the plan. Auditing employers accounting for employee benefits is discussed in Chapter 20. In planning the audit, the auditor should obtain sufficient information to identify inherent risks and assess control risk. The auditors understanding of internal control may need to encompass controls that are maintained by others, including controls over transactions initiated by plan participants for which there is no written documentation. The audit guide provides guidance in this area as well as a discussion of the use of a service organizations auditors report on the service organizations internal control. Statement on Auditing Standards (SAS) No. 70, Reports on the Pro