Department of Labor Letter Response

Recently, the Department of Labor (DOL) sent letters to plan sponsors regarding the importance of audit quality. We have been notified by the AICPA Employee Benefit Plan Audit Quality Center (of which we are a member) that this communication was sent by the DOL to ALL plan filers in the EFAST2 database identified as requiring an audit. We have read the letter and agree wholeheartedly with all of the DOL’s comments.

Melton & Melton takes audit quality very seriously and we would specifically like to address the qualifications highlighted in the DOL letter as they relate to our firm:

  • The number of employee benefit plans the CPA audits each year, including the types of plans – We currently audit 114 benefit plans including defined contribution and defined benefit.
  • The extent of specific annual training the CPA received in auditing plans – Each year, two firm partners and/or managers attend the AICPA National Conference on Employee Benefit Plans. We also prepare and teach an annual in house class specific to employee benefit plan audits. Throughout the year, we listen to webinars broadcast by the AICPA EBP Audit Quality Center.
  • The status of the CPA’s license with the applicable state board of accountancy – Our licenses are current in all states that we perform audit work in.
  • Whether the CPA has been the subject of any prior DOL findings or referrals or has been referred to a state board of accountancy or the American Institute of CPA’s for investigation – Melton & Melton has not been the subject of any DOL findings or referrals to the state board or AICPA for investigation.
  • Whether or not your CPA’s employee benefit plan audit work has recently been reviewed by another CPA (this is called a “Peer Review”) and, if so whether such review resulted in negative findings – Our firm is required to undergo a peer review of our audit work every 3 years. This review is performed by a firm knowledgeable in employee benefit plan audits and that is a member of the AICPA Employee Benefit Plan Audit Quality Center. Past reviews have not resulted in any negative findings. Our most recent peer review report can be found on the AICPA website. Our audit work related to SEC filings is also reviewed by the PCAOB every 3 years.

Please contact us if you would like to have a more detailed discussion regarding how Melton & Melton maintains audit quality or would like more information about our employee benefit plan audit services.