Increasing Cost & High Risk
EBP audits are a niche practice area. As a result, the cost of resources required to maintain a firm’s expertise in light of increasing DOL regulation, constant changes to auditing standards, and the complexity of new investment options available to Employee Benefit Plans can be overwhelming. In addition to increasing costs, engaging in an EBP audit can subject a firm to more risk than they desire to assume. This can create a significant problem for firms who don’t specialize in EBP auditing.
Staff Shortage for Plan Audits
Many firms find hiring and retention of staff to be one of their biggest challenges. Few firms have the luxury of available staff to meet the “non-core” needs of clients. Complicating matters further, there can be significant economic challenges associated with meeting the requirements of performing lower profit services while higher margin opportunities must wait until staff become available.
The term “workload compression” makes most CPAs shutter. As a result of summer scheduling and the increasing amount of time needed by third parties to complete their work, EBP audits are often prone to workload compression. Workload compression coupled with increasingly demanding regulatory deadlines places strain on all the resources within a firm, including quality.