About the Study

In 2017, the Chief Evaluation Office (CEO) partnered with the Employee Benefits Security Administration (EBSA) and funded contractor Summit Consulting to conduct An Analysis of Benefit Plans Auditors under the Administrative Data Research and Analysis portfolio of studies. The statistical analysis aims to analyze trends in employee benefit plan audit quality, particularly when plan administrators change certified public accountant (CPA) firms. Researchers performed a trend analysis of plan administrators’ CPA selection and switching behavior between Plan Years 2011 and 2015 using Form 5500 filing data and audit reviews conducted by EBSA.

EBSA requires annual auditing of all employee benefit plans, and plan administrators engage CPAs to conduct the audits. To confirm audit quality each year, EBSA reviews a subset of the audits, conducts site visits to CPAs performing over 100 audits, and performs other outreach activities. A 2015 Audit Quality Study found that deficiency rates of audits conducted in 2011 varied greatly by the size of the CPA’s benefit plan practice. CPA firms completing between one and two audits per year had a 76% deficiency rate, compared to a 12% deficiency rate for firms performing at least 100 audits per year.

This Department of Labor-funded study was a result of the annual learning agenda process. It contributes to the labor evidence-base to inform data and reporting programs and policies and addresses Departmental strategic goals and priorities.

The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.