When should you prepare for your next 401(k) audit?

By Tiffany Johnson November 10, 2026

For many plan sponsors, the October 15 filing deadline marks the end of another 401(k) audit cycle. Once the audit is complete and the Form 5500 has been filed, attention naturally turns to other priorities. However, the best time to start preparing for next year’s audit is now.

Rather than waiting until the next audit request list arrives, start preparing now. Taking a proactive approach can make the next audit more efficient and reduce last-minute requests. Acting immediately also ensures that key takeaways and lessons learned from the last audit are more likely to be thoughtfully incorporated into the following year’s plan, resulting in practical enhancements to the future experience.

Here’s a brief checklist of items to consider:

• Reflect on the audit process: With the audit still fresh in mind, take time to reflect on the audit process. What went well? What requests took more time to process or were difficult to obtain? This reflection can help improve next year’s audit experience by identifying bottlenecks and opportunities for process improvements before fieldwork begins.
• Review the audit findings: If the audit resulted in operational errors, audit findings or management letter comments, develop a plan to address them. Waiting until next year’s audit to address these matters increases the likelihood that the same issues will recur. If findings were identified that require correction, such as delinquent participant contributions, work with your third-party administrator (TPA) to ensure such matters are corrected on a timely basis and in accordance with applicable guidance.
• Review the audit request list: With the routine nature of 401(k) audits, the request list will typically remain consistent year to year. Use the prior year list to identify information that can be organized or prepared in advance. Not every request will be applicable to the next audit, and the audit team may request additional information as circumstances change. However, using the prior year’s request list as a roadmap can make the next audit engagement considerably more manageable.
• Prepare reconciliations: If not already being performed on a quarterly basis, as soon as the plan year closes, prepare reconciliations that tie the annual recordkeeper reports, payroll records, and trust/custodial statements to identify discrepancies on a timely basis, rather than discovering them months later during the audit.
• Monitor plan changes throughout the year: Maintain copies of plan amendments, board or committee approvals, fee disclosures, service provider agreements, and changes in payroll or recordkeeping systems as they occur. Waiting until the audit begins to gather these items can result in unnecessary delays.
• Coordinate census preparation and compliance testing: Many year-end compliance testing delays occur because census data is incomplete, inaccurate, or not provided to the plan’s TPA on a timely basis. Establish a process and timeline for reviewing the annual census and submitting it to the TPA as part of the year-end payroll and W-2 process.

The next audit starts when the current one ends

Use the months between audit cycles to address findings, organize records, and refine processes. A little preparation now can save significant time and effort when next year’s audit begins. Proactive preparation can also help identify operational issues earlier, reducing the risk of compliance errors and costly corrections.

If you would like to discuss these matters further, please contact Tiffany Johnson or your BNN advisor. You can learn more about BNN’s employee benefit plan solutions here.