---
title: Start Preparing Now for SAS 136
description: Bellevue CPA firm covers how auditors can start preparing for SAS 136 changes.
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---
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# Start Preparing Now for SAS 136
By Wende Wadsworth | Mar 09, 2021
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INSIGHTS/BLOG
In 2019, the AICPA issued Statement on Auditing Standards (SAS) No. 136, *Forming an Opinion and Report on Financial Statements of Employee Benefit Plans Subject to ERISA.* SAS 136 prescribes certain new performance requirements for financial statement audits of ERISA employee benefit plans.
In addition, SAS 136 changes the form and content of the related auditor’s report. The goal is to improve audit quality while also enhancing the communicative value and transparency of the report. The statement includes new requirements for all phases of employee benefit plan audits, including engagement acceptance, performance procedures, risk assessment and response, communication with those charged with governance, and reporting.
**Effective Date Delayed**
Originally, SAS 136 was scheduled to become effective for audits of ERISA plan financial statements for periods ending after December 15, 2020. However, this effective date has been pushed back one year—it will now be effective for audits of ERISA plan financial statements for periods ending after December 15, 2021.
As a result, 2021 year-end audits being performed in 2022 must follow the performance and reporting requirements of SAS 136, as well as use the new form of the auditor’s report. Early adoption is permitted for 2020 year-end audits.
**No More Limited Scope Audits**
SAS 136 stipulates that audits performed pursuant to ERISA Section 103(a)(3)(c) no longer be referred to as “limited scope” audits. Instead, these audits will be referred to as ERISA Section 103(a)(3)(c) audits. This is not considered a scope limitation and will no longer be a disclaimer of opinion.
According to the statement, an ERISA Section 103(a)(3)(c) audit is unique to employee benefit plans and is not considered a scope limitation. Therefore, auditors will no longer issue a modified opinion due to information that is certified by a qualified institution. Instead, the report will provide a two-pronged opinion based on the audit and the procedures performed relating to the certified investment information.
The audit report will provide an opinion on whether the information not covered by the certification is presented fairly. It will also provide an opinion on whether the certified investment information contained in the financial statements agrees with or is derived from the certification.
**Updated Audit Requirements**
In addition, SAS 136 contains a number of clarified audit requirements, relating to the following:
- Engagement acceptance
- Audit risk assessment and response
- Communication with management or those charged with governance
- Forming an opinion on plan financial statements
- Considerations relating to Form 5500 filing
The statement also requires several written representations from management, including representations that:
- Indicate management has provided the auditor with the most current plan instrument and all plan amendments.
- Acknowledge management’s responsibility for administering the plan and determining that transactions presented and disclosed in the financial statements conform with the plan’s provisions.
- Acknowledge that management’s election of an ERISA Section 103(a)(3)(c) audit does not affect its responsibility for the financial statements.
**Auditor Expectations**
Finally, SAS 136 lists specific procedures to be performed by auditors when conducting an ERISA Section 103(a)(3)(c) audit. These include the following:
- Evaluate management’s assessment of whether the entity issuing the certification is a qualified institution.
- Identify which investment information is certified.
- Obtain a representation from management that they have read the certification.
- Compare the certified investment information with the related information presented and disclosed in the financial statements and supplementary information.
- Read the disclosures related to the certified investment information to assess whether they are in accordance with the presentation and disclosure requirements of GAAP.
**Start Preparing Now**
Now is the time to start getting ready for the new effective date of SAS 136. By preparing well ahead of time, you’ll be less likely to encounter unexpected obstacles once the provisions become effective next year.
*Please contact us if you need assistance preparing for SAS 136.*
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