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ERISA 103(a)(3)(C) Audit Standard: Limited Scope Audit and Reducing Disclaimers

SAS 136: Audit Performance and Disclosure Duties, Evaluating Qualified Investment Information

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

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Conducted on Wednesday, October 28, 2020

Recorded event now available

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This course will provide audit professionals and employee benefit plan (EBP) sponsors with a critical analysis of AICPA Statements on Audit Standard (SAS) 136, with a particular focus on ERISA Section 103(a)(3)(C) audit rules and the alteration of the prior limited scope audit provisions. The panel will provide an in-depth discussion of the additional requirements imposed on auditors and plan sponsors.


In 2019, the AICPA issued SAS 136, which made significant changes to virtually every aspect of audits of EBPs covered by ERISA. The most significant impact was the inclusion of Section 103(a)(3)(C) audit rules, which increases the auditor's responsibilities in performing audits. In April 2020, the AICPA Auditing Standards Board voted to delay implementation by one year due to the ongoing coronavirus pandemic.

ERISA Section 103(a)(3)(c) permits a plan sponsor to request a limited scope audit of the ERISA plan, in which plan management may elect to exclude from the audit certain investment information held and certified to by a "qualified institution" such as a bank or insurance carrier. In such a limited scope audit, auditors issue a disclaimer of opinion on the financial statements. However, as the number of limited scope audits has increased, DOL studies have found a very high rate of audit deficiencies in limited scope audits.

In response to these deficiencies, the AICPA created the ERISA Section 103(a)(3)(C) audit provisions to impose duties on auditors performing engagements in which plan management elects to exclude plan investment information. Instead of issuing disclaimers, auditors must issue an opinion that excludes the certified assets and must obtain and evaluate management representations as to which investment information is certified, and that the entity issuing the certification is a qualified institution under DOL regulations.

Listen as our experienced panel provides a critical analysis of the ERISA Section 103(a)(3)(c) audit rule and the changes to the "limited scope audit" allowances.



  1. Statement on Auditing Standards (SAS) 136
  2. ERISA Section 103(a)(3)(C) audit as a significant change to prior "limited scope audit"
    1. Duties to obtain management representations regarding investment information scope and certifying entity
    2. Assessing disclosures related to certified investment information
    3. Duties when an auditor becomes aware of deficiencies, inaccuracies, or incompleteness of certified investment information
    4. Duties to render an opinion on financial statement matters not directly relating to the certified investment information, including non-certified investment information and disclosures
  3. Other SAS 136 provisions
    1. Engagement acceptance requirements
    2. Provisions on risk assessment
    3. Duty to communicate with management or parties responsible for plan governance
    4. Receipt and examination of "substantially complete" Form 5500 before completion of a report
    5. Performance procedures
    6. The requirement to obtain management representations
  4. Implementation of new standards


The panel will discuss these and other critical issues:

  • How the ERISA Section 103(a)(3)(C) audit structure changes the practice of "limited scope audits" where plan managment elects to have certified plan investment information excluded from the plan audit
  • Limited circumstances under which an auditor may issue a disclaimer and what information the auditor must obtain
  • Auditor duties to examine the substantially complete Form 5500 as part of the audit


Kanter, Jessie
Jessie T. Kanter, CPA

Citrin Cooperman

Ms. Kanter has nearly 20 years of accounting experience, including audit and review services for privately held...  |  Read More

Nahorney, Janet
Janet Nahorney, CPA

Blum Shapiro

Ms. Nahorney specializes in the planning, designing and auditing of qualified retirement plans and employee welfare...  |  Read More

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