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2020 Form 5500, Schedule H, Part III Accountant's Opinion

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2020 Form 5500, Schedule H, Part III Accountant's Opinion
Under SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, limited-scope audits for plans with investments certified by a qualified institution are renamed ERISA Section 103(a)(3)(C) audits. Additionally, SAS No. 136 no longer allows for a disclaimer of opinion solely if management elects to have an audit performed in accordance with ERISA Section 103(a)(3)(C) pursuant to 29 CFR 2520.103-8 of the DOL’s Rules and Regulations for Reporting and Disclosure under ERISA. The original effective date for SAS No. 136 was for periods ending on or after Dec. 15, 2020, but the AICPA Auditing Standards Board deferred the effective date of SAS No. 136 until periods ending on or after Dec. 15, 2021, although earlier implementation is permitted. 
As of the date of the deferral, the 2020 Form 5500 Schedule H, Part III Accountant’s Opinion section had already been revised to reflect the new standard. However, most firms are not early adopting SAS No. 136. The delay has created a mismatch between the Accountant’s Opinion section in Part III of Schedule H and the delayed effective date of the new audit standard if the standard is not adopted early.
If the auditor early adopts SAS No. 136 for the 2020 filing period, preparers should simply refer to the 2020 Form 5500, Schedule H instructions for lines 3a and 3b. For situations where auditors will be issuing accountant's opinions using the current (pre-SAS No. 136) auditor reporting standards, preparers should note that at the 2021 AICPA Employee Benefit Plans Conference, Michael Auerbach, Chief Accountant of the DOL's Employee Benefit Security Administration, stated that, while the DOL has not issued clarifying guidance on how to report the type of accountant's opinion on Schedule H, Part III Accountant's Opinion of the 2020 Form 5500, if SAS No. 136 is not early adopted for 2020 plan year audits, the DOL staff's preferred treatment is for preparers to check line 3a as "Unmodified" (box (1)) and to check the box on line 3b based upon the scope of the plan’s audit. However, the DOL staff recognizes that some firms are not comfortable checking "unmodified" if they have issued a limited scope disclaimer opinion and, in such cases, the preparer may check "Disclaimer" (box (3)) on line 3a. Mr. Auerbach noted that while this treatment is not preferred, it will not, in and of itself, create an enforcement issue.
2020 Form 5500, Schedule H:

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