Under Department of Labor (DOL) independence rules for auditing employee benefit plans, which of the following would impair independence?

Answer options:

The auditor's firm provides actuarial services to the plan sponsor, unrelated to the plan.

The auditor's firm maintains the financial records for the employee benefit plan.

An actuary from the auditor's firm performs a valuation for the plan.

The auditor belongs to the same country club as the plan administrator.

How to approach this question

DOL Rules: You cannot audit what you maintain. Record keeping for the plan impairs independence.

Full Answer

B.The auditor's firm maintains the financial records for the employee benefit plan.✓ Correct

The auditor's firm maintains the financial records for the employee benefit plan.

The DOL (Department of Labor) independence rules prohibit an accountant from maintaining the financial records of the employee benefit plan they audit. This creates an insurmountable self-review threat.

Common mistakes

Thinking DOL rules are identical to AICPA rules (DOL is sometimes stricter on specific services).

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