Private Audits
We provide audit services to insurance companies, retail pharmacies, along with pension and profit sharing plans. We can provide you with cost effective, comprehensive quality service. Our involvement includes the normal audit function, as well as providing accounting systems setup, installation, training, support, and consulting services as needed. We offer a wide range of services, including the evaluation and computational analysis of employee benefit programs. In connection with expertise that we do not provide, we would be able to refer a capable contact.


Employee Benefit Plans 

Employee benefit plans are very significant economic entities in the United States today. There are approximately 700,000 pension plans covering more than 90 million participants and beneficiaries. In addition, there are approximately nine million health and welfare benefit plans.

Employee benefit plans own significant amounts of investments. Pension plans own more than $4.3 trillion in assets. Plans that meet numerous and complex tax qualification requirements do not pay federal income taxes on the income their investments generate; neither do the plan participants pay taxes until they receive income in the form of distributions from the plan. Participants in qualified health and welfare benefit plans are not taxed on the value of the benefits provided by the plan. In addition, some types of employee benefit plans offer participants tax exclusions for portions of their earnings they contribute to the plan.

In the early 1970's, there was great concern when participants in a large unfunded pension plan lost their benefits due to the plan sponsor’s bankruptcy. Also, it was not uncommon for employees who worked many years to find that they could not receive any of their accumulated plan benefits upon retirement or termination because of their plans’ strict vesting schedules. As a result, the Employee Retirement Income Security Act of 1974 (ERISA) was passed to provide minimum standards of vesting, funding, and fiduciary behavior for pension and welfare benefit plans. ERISA also established the Pension Benefit Guaranty Corporation to insure benefits in case certain types of pension plans were unable to meet benefit obligations.

In addition, ERISA established record-keeping and financial-reporting responsibilities for plans and imposed a requirement for plans with 100 or more participants to have an annual audit of their financial statements. ERISA gave the Department of Labor (DOL) and the Internal Revenue Service (IRS) authority to issue regulations specifying requirements for the financial records, tax return, annual report, and audit. Those requirements include financial statement requirements and audits in accordance with generally accepted auditing standards (GAAS).

Employee benefit plans may be broadly classified as either retirement plans or health and welfare plans. Each of these two categories may include either defined benefit or defined contribution plans. For example, a retirement plan may be either a defined benefit retirement plan (typically called a pension plan) or a defined contribution plan. There are several specific types of defined contribution plans, such as profit-sharing plans, employee stock ownership plans (ESOPs), and 401(k) plans. Health and welfare plans may also be defined benefit or defined contribution plans and may include specific types such as medical, disability, or life insurance plans.

Client references available upon request

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Jean Middleton, CPA
QuickBooks ProAdvisor®


Rukkila, Negro and Associates, CPAs, PC
310 Shelden Avenue • Houghton, MI 49931
906.482.6601 TEL   906.482.9046 FAX

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