Employee Benefit Plan (EBP) audits are a critical component of financial oversight. With the rise of AI audit software, firms now have more innovative, faster ways to ensure employee benefits, including HSA and retirement plans, comply with fiduciary and regulatory standards. These audits assess whether the plan’s financial statements are fairly presented and whether the plan is operating by its terms and according to government risk and compliance requirements.
EBP audits are governed by a complex framework of regulations, including:
- Accounting standards: Generally Accepted Accounting Principles (GAAP) and, specifically, ASC 960, 965, and 962 for different types of plans.
- Auditing standards: Audits must follow standards set by the AICPA, particularly SAS No. 136, which provides specific guidance on EBP audits.
- Government risk and regulatory oversight: The Department of Labor (DOL) and the Internal Revenue Service (IRS) oversee compliance, with significant penalties for errors or delays. Many firms invest in separate GRC Tools and risk assessment software to address these compliance requirements, while some audit automation solutions embed this feature into their core platform.
With rigorous scrutiny from regulators and heightened expectations for audit quality, firms are under pressure to perform accurate and efficient employee benefits audit management. And that’s precisely where Trullion’s AI-powered Audit Suite comes in.
We’ll look at key components of EBP audits, including how modern tools like Trullion introduce automation and advanced AI to streamline these audits while unlocking value for all stakeholders.
1. Automated data matching across source documents
In traditional EBP audits, reconciling participant data across multiple documents, such as payroll registers, plan documents, and custodian statements, can be a painstaking process. Manually checking contribution amounts, eligibility criteria, and vesting schedules consumes valuable audit hours.
For example, an auditor tracing a participant’s contribution across payroll, plan provisions, and custodial records to ensure accuracy may spend hours tracking inconsistencies, when audit trail software could automate this process.
Trullion’s AI advantage
Trullion’s Data Match engine intelligently matches participant data – such as contribution amounts, hire dates, and vesting info – across payroll registers, plan documents, and custodian statements, using AI and smart rules.
Employee benefits audit impact
Manual reconciliation becomes a thing of the past. Auditors save significant time on contribution testing and tracing, while maintaining a transparent audit trail. The result is improved audit quality, reduced risk, and a faster turnaround.
2. Intelligent document review at scale
Audit teams often face a mountain of plan documents, amendments, and participant records, each with critical details buried in inconsistent formats and language. Manually reviewing and extracting these data points is both inefficient and prone to error.
In some cases, auditors may need to review hundreds of pages to confirm eligibility rules for just a sample of participants, which is especially cumbersome in large plans.
Trullion’s AI advantage
Trullion uses AI to automatically extract and tag relevant fields, such as plan provisions or eligibility rules, from large volumes of documents, significantly reducing manual workload.
Employee benefits audit impact
Auditors can quickly validate plan terms and participant eligibility, even across large participant populations. This leads to faster, more accurate audits with fewer review cycles.
3. Centralized, structured document hub
A common challenge in employee benefits audits is managing and organizing a large volume of documents spanning multiple years, including plan amendments, board minutes, testing templates, and other related materials. Without a centralized system, teams spend (and waste) countless hours searching for the right files.
Take the typical case of a newly assigned team member needing to spend days getting up to speed due to scattered or inconsistent file structures.
Trullion’s AI advantage
Trullion’s Audit Suite creates a dynamic source of truth for plan documents, amendments, board minutes, and other permanent file content – all automatically organized by year and client.
Employee benefits audit impact
Trullion improves continuity across audit years, making onboarding faster and easier for audit teams. With historical context readily available at their fingertips, auditors are able to spend more time on high-value work and less time on administrative tasks.
4. Built for contribution and eligibility testing
Contribution and eligibility testing are core components of every EBP audit. Yet many firms still rely on disconnected spreadsheets and one-off templates, introducing risk and inconsistency.
Take an audit team recreating a testing workbook from scratch each year, for each client, and note how this increases the chances of formula errors or missed data.
Trullion’s AI advantage
With audit software like Trullion, these challenges are addressed through intelligent AI, automation, and streamlined audit workflows. Customizable and reusable templates allow firms to validate salary deferrals, eligibility triggers, and matching contributions with AI-powered precision.
Employee benefits audit impact
With increased efficiency and consistency across plans of all sizes, Audit teams can scale without sacrificing accuracy, delivering higher-quality audits in less time.
5. Scalable for multi-plan engagements
Firms that handle multiple EBP engagements face intense pressure during peak season, particularly ahead of the July 31 Form 5500 deadline. Without scalable systems to manage audit processes, teams can be overwhelmed.
Say a firm is juggling 40+ EBP audits; in many cases, they’ll need to extend hours or hire temporary help to meet deadlines. All this results in increased pressure and increased risk of something going wrong.
Trullion’s AI advantage
Built to manage high volumes of concurrent EBP audits using standardized templates, organized folder structures, and automation throughout the engagement lifecycle.
Employee benefits audit impact
Firms can confidently meet peak demand without extra short-term hiring or overtime. This enables strategic growth and a better work-life balance for audit professionals.
Conclusion: The EBP Audit experience as it should be
The pressure on accounting and audit professionals to deliver accurate, efficient EBP audits has never been higher.
Trullion is redefining the EBP audit process through automation and intelligent AI, designed as a centralized audit management solution. Whether you’re managing single or multi-plan audits, our intelligent platform is designed for performance or peace of mind.
Ready to explore AI audits for your firm? Click here to learn more and see the difference an intelligent audit software platform can make.