Denise Finney Speaks to the Tennessee State Society of CPAs on Independence

On May 4, Denise Finney, a director in EisnerAmper’s Pension Services Group, spoke at the annual Tennessee State Society of Certified Public Accountants’ Employee Benefits Conference. Denise addressed the audit independence standards as promulgated by the American Institute of Certified Public Accountants, the Department of Labor and the Securities and Exchange Commission, as well as the conditions for providing non-attest services to audit plan clients.

During her discussion on AICPA independence provisions, Denise focused on the provision that states that auditors must be independent from affiliates, which is new for engagement periods beginning on or after January 1, 2014. Denise explained that affiliates include:

1. Plan sponsors.
2. The entity that controls the plan sponsor.
3. Any union or participating employer that has significant influence over a multiple or multiemployer plan.
4. Investment in a plan (if the plan controls the investment entity or if the investment gives the plan significant influence over the investment entity and the investment is material to the plan).
5. Other plans of the plan sponsor.

There was also a discussion on the exposure draft issued by the AICPA, dated April 16, 2015, to revise the definition of affiliate as it relates to multiple and multiemployer plans.  Revisions include: 

1. For multiemployer plans, the AICPA is adding “material” to the significant influence factor. An affiliate is “Any entity, such as a union, participating employer, or a group association of employers, that has significant influence over a multiemployer employee benefit plan financial statement attest client and the plan is material to such entity.”
2. For multiple employer plans, the AICPA is removing the significant influence factor. An affiliate is “The participating employer that is the plan administrator of a multiple employer employee benefit plan financial statement attest client.”

The AICPA has requested comments on the exposure draft by May 18, 2015.  And the revised definitions will be effective the last day of the month in which the interpretation is published in the Journal of Accountancy. 

In addition to her presentation on independence and non-attest services, Denise also participated in an employee benefit plan expert panel, along with Marcus Aron, senior auditor from the U.S. Department of Labor.