401(k) plan audits, from a firm that does nothing else
Ledgerline is building an audit firm that does one thing: the ERISA 401(k) plan audit. The fee is fixed before you sign, your documents go on one checklist split by who holds them, and the testing covers your plan’s whole population rather than a sample. We are booking engagements for the coming season, starting December 2026.
What happens during a Ledgerline audit?
An engagement runs in four stages, and your portal shows which one you are in.
- Gathering. You sign the engagement letter in your secure portal and invite your TPA, finance and HR contacts. Each person gets a checklist of only the documents they hold. Connect your payroll provider and the census and payroll register arrive on their own.
- In review. We test the plan’s records. If something needs support, you get a specific request (one participant’s loan agreement, say), not a second copy of the whole list, and every item has its own thread for questions.
- Wrapping up. We read your draft Form 5500 and you sign the management representation letter.
- Complete. You receive the signed independent auditor’s report for your Form 5500, which your TPA files.
What documents will you need from us?
Twenty-eight items in all, and nobody is asked for one they do not hold. Here is who provides what:
From HR or the plan sponsor 13 items
- Signed plan document and amendments, and the adoption agreement
- Summary plan description
- IRS determination or opinion letter
- Fidelity bond confirmation
- Service agreements with your TPA, recordkeeper and custodian
- Employee census (or connect payroll and skip it)
- Distribution forms and approvals, loan agreements, and hardship self-certifications
- Draft Form 5500 and draft financial statements
- The signed engagement letter and, at the end, the management representation letter
From your TPA 13 items
- The ERISA 103(a)(3)(C) certification from your plan's qualified institution
- SOC 1 Type 2 reports for the recordkeeper, custodian and TPA, plus a bridge letter
- Trust or custodial statements and the recordkeeper's year-end package
- Census details payroll does not hold: hours, waivers, classes, HCE flags
- Nondiscrimination, top-heavy and contribution-limit testing results
- Support for any corrective distributions
From finance 2 items
- Payroll register (or connect payroll and skip it)
- The plan's general ledger or journal entry listing
Anything that does not apply to your plan can be marked not applicable with a reason, so nobody chases it. The recordkeeper’s year-end package is often the item that takes longest to arrive, so it is worth asking for first.
What does the audit test?
The whole population, not a sample: every participant, pay period, distribution, loan, fee and journal entry in your plan’s records. That covers:
- Contributions: deferrals and match reconciled across payroll, the trust and the recordkeeper, and every pay period's deposit timed against the date it was withheld
- Participant data, with the employer match recalculated from your plan's own formula
- Eligibility and entry dates for every employee and every contribution source
- Annual limits and nondiscrimination testing, recomputed rather than taken on trust
- Distributions, loans and forfeitures
- Your ERISA 103(a)(3)(C) certification, and that it covers what it needs to
- Participant balances against the trust's net assets
- Fees paid from the plan, and transactions with parties in interest
- Journal entries screened for unusual activity
How long does a 401(k) audit take?
40 to 60 hours of audit work once every document is in hand. Most of the time between engagement and report is spent waiting for documents, which is why you get the full list on day one instead of in waves.
Who signs the audit, and how does Ledgerline stay independent?
A licensed CPA partner with attest authority signs every opinion, and you will know who that is before you sign the engagement letter.
Your plan’s management stays responsible for the plan’s records and financial statements, as the engagement letter sets out. When the audit finds a problem, we tell you what it is and who should correct it, usually your TPA or recordkeeper. We do not make the correction ourselves, and we do not prepare or file your Form 5500.
Is this your plan’s first audit?
A first audit covers ground a repeat audit does not. If your plan has just crossed 100 participants with a balance, what a first auditor actually looks at walks through it. Not sure whether you need an audit at all? Check your plan’s own filing. Wondering what it costs? See pricing.
Frequently asked questions
What does a 401(k) plan audit involve?
An independent CPA examines the plan's financial statements and the records behind them: contributions, eligibility, limits, distributions, loans, fees and investments, then issues a signed report that is attached to the plan's Form 5500. A plan needs one once it has 100 or more participants with an account balance at the start of the plan year.
What documents does a 401(k) audit need?
With Ledgerline, 28 items split across the people who hold them: 13 from HR or the sponsor (plan document, bond, service agreements, distribution and loan paperwork), 13 from the TPA (the 103(a)(3)(C) certification, SOC 1 reports, trust statements, testing results) and 2 from finance (payroll register and general ledger). Connecting your payroll provider supplies the census and payroll register for you.
Does Ledgerline test a sample of transactions?
No. The testing runs on the whole population: every participant, pay period, distribution, loan, fee and journal entry in the plan's records, rather than a sample of them.
How long does a 401(k) audit take?
40 to 60 hours of audit work once every document is in hand. Most of the elapsed time is spent waiting for documents, which is why the full list is sent on day one.
Does Ledgerline prepare or file our Form 5500?
No. Your TPA or plan administrator prepares and files it. The audit provides the independent auditor's report that is attached to it, and we read your draft before the report is dated.
When can a Ledgerline audit start?
Engagements begin in December 2026. Booking now means your documents can be requested and gathered before then.
Engagements begin in December 2026. A short call is enough to tell you what your plan would need and when we could start.