---
title: Section 403(b) Retirement Plan Financial Statement Audits
description: 403(b) plans may require annual audits under DOL rules. Prepare with sample questions auditors typically ask and reduce your risk of compliance issues.
---

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# [Section 403(b) Retirement Plan Financial Statement Audits](https://accountants.sva.com/biz-tips/section-403b-retirement-plan-financial-statement-audits-questions-to-expect-from-your-plan-auditor)

 Written by [Mike Gustafson, CPA](https://accountants.sva.com/biz-tips/author/mike-gustafson) | May 15, 2019

| **Highlights:** |
| --- |
| - The article explains why 403(b) retirement plans may require financial statement audits and what triggers an audit requirement for plan sponsors. - It outlines common questions auditors ask, focusing on plan governance, internal controls, participant data accuracy, and compliance with regulations. - Guidance helps nonprofit organizations prepare documentation, strengthen processes, and reduce audit issues by understanding auditor expectations in advance. |

Under U.S. Department of Labor (DOL) regulations, retirement plans sponsored by charitable organizations and schools under [Internal Revenue Code section 403(b)](https://www.irs.gov/retirement-plans/irc-403b-tax-sheltered-annuity-plans#:~:text=A%20403\(b\)%20plan%20\(tax%2Dsheltered%20annuity%20plan,their%20salary%20into%20individual%20accounts.) and covered under the Employee Retirement Income Security Act of 1974 (ERISA) are subject to the annual reporting and audit requirements of ERISA.

ERISA-covered 403(b) plans with 100 or more participants generally are required to file [audited financial statements](https://accountants.sva.com/biz-tips/financial-audits-an-overview). 403(b) plans with fewer than 100 participants may be eligible to use abbreviated reporting forms without audited [financial statements](https://accountants.sva.com/biz-tips/financial-statements-demystified-a-guide-for-businesses).

To get ready for your [audit](https://accountants.sva.com/services/audit-and-assurance), review these example questions that plan management may be asked. The plan auditor may also ask plan management other questions that are not on this list.

## General Questions

- Have any plan amendments been adopted or become effective for the year under audit, or after the plan’s year-end?
- Have there been any changes in plan status (e.g., [mergers](https://accountants.sva.com/services/merger-and-acquisition-services), spin-offs, partial terminations)?
- Is there any intention to terminate or change the plan?
- Has there been a significant adverse change in the sponsor’s financial condition?
- Has the plan sponsor had any communication from its auditors regarding material weaknesses or significant deficiencies in the sponsor’s [internal controls](https://accountants.sva.com/the-importance-of-internal-controls-ebook-download)?
- Have there been any significant changes in the workforce during the year under audit?
- Have there been any changes in investment policies or practices?
- Have there been any inquiries from the IRS or the DOL during the current or prior plan years?
- Have there been any regulatory reviews, enforcement matters, investigations, or [litigation](https://accountants.sva.com/services/litigation-support)?
- Have any non-exempt transactions (e.g., non-timely remittance of employee contributions) or events or activities that could cause loss of tax-exempt status (e.g., violations of any law or regulation or plan provisions) been identified either during the year under audit or in the past?
- Is there any pending or threatened litigation against the plan?
- Have there been any participant complaints?
- Are there any significant transactions with parties-in-interest?

## Review the Complete List

The above questions are just the start. Additional categories of questions you should review are: Plan Reporting and Governance, Service Providers and Controls, and [Fraud](https://accountants.sva.com/services/fraud-forensic-accounting).

<https://accountants.sva.com/hs/cta/wi/redirect?encryptedPayload=AVxigLLH7kx3mNz51p2dAwvBccqkQm1SNjKi9RIxfTtxa9QJxCN7EUOgYZR2UN0FAO9AX%2FElMr8rri8G%2F1cfAD2IKWbRMranduMIhh79RPf7uEW46YVkddcVF7Kb1JmyH0VUocZIu53udSwtgAmxTM%2B07o3GrnKEizV7gx%2BPAYzhN9CN09H5nlg3j30alQ%3D%3D&webInteractiveContentId=188220352679&portalId=2939357>

 

Source: AICPA American Institute of Certified Public Accountants

*© 2019 SVA Certified Public Accountants*

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