Written By Larry Beebe
P: 301.272.6025 E: email@example.com
Let’s say the trustees of a Plan have decided to request proposals from firms to conduct payroll audits. What questions should be asked of the payroll audit firms during the proposal process?
This list of 20 questions should be asked of every firm responding to the proposal. Ideally, these questions should be asked during the proposal process and the firms should be asked to respond to each of the questions in writing. Those firms selected to present to the trustees should then be asked to comment further on their responses during their oral presentations.
Following are the 20 questions the trustees should ask; these questions will each be discussed in future blog posts:
- How many years have you (the primary auditor who would be doing the audit) been doing payroll audits? How many years has your firm been doing payroll audits?
- How many audits do you do annually?
- What percent of your payroll audits have findings?
- What is the relationship of your audit findings to your audit costs?
- Do you audit all employees 100% or do you test employees?
- How long does your typical audit take if the employer has 30 employees? 100 employees? 500 employees?
- What are the qualifications of your payroll audit staff?
- Do you charge for travel time?
- Do you charge a flat fee per audit or an hourly rate?
- Have you done payroll audits for our industry or for similar industries?
- What is a typical time period between the assignment of an audit and delivery of the audit report?
- Will we receive progress reports?
- Should we have a three or four year cycle to audit all employers?
- Should all employers be selected randomly for audit?
- Should we ever change the time period between audits for a given employer?
- How long does it take to issue a report on a no findings audit?
- Do you discuss your findings with the employer when you complete your field work?
- How do you schedule a payroll audit?
- Do you have a dedicated payroll audit staff?
- What is the experience level of your payroll audit staff?
Asking these questions early in the search process will allow you to see the depth of the respondents and their ability to have a ready answer for many situations, and will help avert unwelcome surprises during the audit process.