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403(b) Plan Annual Audits: Identifying Costly Reporting Errors, Evaluating Alternative Solutions

Determining Audit and Form 5500 Filing Requirements for Governmental and Nonprofit Plans

Recording of a 110-minute CPE webinar with Q&A

This program is included with the Strafford CPE Pass. Click for more information.
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Conducted on Tuesday, February 20, 2018

Recorded event now available

or call 1-800-926-7926

This course will provide employee benefits administrators, auditors and plan sponsors with best practices to prevent serious and costly errors in preparing for 403b plan audits. The panel will differentiate between 401k and 403b audits, explain the pitfalls that practitioners often encounter in these audits, and outline how to address these issues based on real world experiences.


Auditing and administering 403b plans requires audit professionals and plan sponsors to stay on top of myriad and ever changing IRS and DOL rules and regulations. Any 403b plan qualifying as an ERISA plan with more than 100 eligible participants must file audited financials along with Form 5500, which are closely scrutinized during DOL audits. While there are many similarities between audits of 403b and 401k plans, auditors and sponsors of 403b plans face several unique audit and administrative challenges specific to those plans.

Audits of 403b plans have only been required since 2009, and while audit professionals have had time to adjust to the new requirements, several red flags continue to plague sponsors and auditors alike. Determining which accounts need to be reported on financial statements, and continued variances between plan documents and administrative practices present potential issues for plan sponsors.

Benefits audit professionals and advisers must know the areas of focus for both the IRS and DOL in a Form 5500 before filing—and be able to identify problems in prior filings to get ahead of any issues with the IRS with appropriate amendments. Understanding common areas of deficiency can help you increase your accuracy in filing, take action to correct prior errors, and prepare for IRS and DOL audits.

Listen as our panelists offer best practices and insights based on real world experience for avoiding common high risk mistakes associated with 403b audits. The panel will also outline approaches to identify and correct plan errors before an audit or after a filing.



  1. 403b plan regulatory overview
    1. Relevant forms and regulations
    2. Form 5500
    3. 80/120 Participant Rule
    4. Discrimination testing
  2. 403b Financial Statement Issues
    1. Other beginning balance disclaimers
    2. FAB 2009-02 disclaimer
    3. Loans
    4. Common investments
    5. Multiple service providers
  3. Common 403b plan operation errors
    1. Definition of compensation
    2. Deviations between plan documents and administration
    3. Eligibility
    4. Others
    5. Potential fixes for errors
  4. Benefit plan audit experiences


The panel will discuss these and other important topics:

  • Common areas of deviation between 403b plan documents and administration
  • Challenges in determining what accounts must be reported on audited financial statements
  • The 80/120 Participant Rule


Flett, Kimberly
Kim Flett, CPA, QPA, QKA, CHRS

Compensation and Benefits Services Managing Director

Ms. Flett is a managing director in BDO’s Compensation and Benefit Services practice. With over 20 years of...  |  Read More

Sanchez, Colleen
Colleen Sanchez, CPA

Warren Averett CPAs & Advisors

Ms. Sanchez is a Member in the Firm’s Audit Division. She has 23 years of public accounting experience, holding...  |  Read More

Schmitz, Wendy
Wendy Schmitz, CPA

Assurance Director

Ms. Schmitz is a member of the firm’s National Employee Benefit Plan Practice and a leader of the employee...  |  Read More

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