DOL and IRS Crackdown Elevates Employee Benefit Plan Audit Quality to Fiduciary Risk
Event summary
- DOL's latest Audit Quality Study found 30% of employee benefit plan audits contain major deficiencies, exposing sponsors to rejected filings, civil penalties, and fiduciary liability.
- LBMC expanded its national platform by integrating Torrillo & Associates, now operating as LBMC Pennsylvania, adding 600+ annual plan audits to its capacity.
- Effective January 1, 2026, LBMC deepened its technical bench across the Mid-Atlantic and Northeast regions.
- Regulators are actively identifying deficiencies through expanded enforcement initiatives and more rigorous Form 5500 filings scrutiny.
The big picture
The shift from compliance to accountability in employee benefit plan audits reflects broader regulatory trends prioritizing audit quality over cost. LBMC's expansion underscores the growing demand for specialized expertise as regulators increasingly hold plan sponsors personally liable for audit deficiencies. This dynamic is particularly acute for organizations with complex vendor structures or multi-location operations, where the stakes for audit quality are highest.
What we're watching
- Regulatory Headwinds
- How the DOL and IRS's intensified enforcement will impact plan sponsors' compliance strategies and audit partner selection.
- Market Consolidation
- Whether LBMC's acquisition of Torrillo & Associates will accelerate industry consolidation among specialized EBP audit firms.
- Fiduciary Accountability
- The pace at which plan sponsors shift from generalist to specialist audit providers to mitigate fiduciary risk.
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