---
title: When Should Your Business Think About a 401(k) Audit?
description: No one gets a 401(k) audit just because. They get one because the Department of Labor requires it. Here’s when your company might need one.
image: https://blog.mgallp.com/hubfs/401(k)%20audit.jpg
---
[](http://www.mgallp.com)
- [Client Portal](https://app.mgallp.com/)
- [Pay Your Invoice](https://mgallp.com/pay-your-invoice/)
- [What We Do](https://mgallp.com/your-problem-to-solve/)
- [Who We Help](https://mgallp.com/why-we-are-right-for-you/)
- [Insights](https://blog.mgallp.com)
- [Our Team](https://mgallp.com/our-team/)
- [Careers](https://mgallp.com/join-us/)
- [Let’s Connect](https://mgallp.com/contact-us/)
-
-
-
# **When Should Your Business Think about a 401(k) Audit?**
%20audit.jpg?width=1200&name=401(k)%20audit.jpg "401(k) audit")
[](http://www.facebook.com/share.php?u=https%3A%2F%2Fblog.mgallp.com%2Fwhen-should-your-business-think-about-a-401k-audit%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.mgallp.com%2Fwhen-should-your-business-think-about-a-401k-audit%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fblog.mgallp.com%2Fwhen-should-your-business-think-about-a-401k-audit%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fblog.mgallp.com%2Fwhen-should-your-business-think-about-a-401k-audit%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=When%20Should%20Your%20Business%20Think%20About%20a%20401%28k%29%20Audit%3F) [](mailto:?subject=Check%20out%20https%3A%2F%2Fblog.mgallp.com%2Fwhen-should-your-business-think-about-a-401k-audit%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Fblog.mgallp.com%2Fwhen-should-your-business-think-about-a-401k-audit%3Futm_medium%3Dsocial%26utm_source%3Demail)
2 min read
401(k) plans are an essential part of a company’s compensation program, helping you hire and retain top employees. They are also inexpensive to offer and give your employees more control over their investments.
The administration of these retirement plans, however, can be complex. As your business grows and you have more employees contribute to your 401(k) program, there may come a time when you need to have an external 401(k) audit.
### **Let’s Talk about When You Might Need a 401(k) Audit**
No one comes to us asking for a 401(k) audit just because. The reason companies may need one as they grow comes down to compliance and not wanting penalties from the IRS.
Once you have 120 eligible participants for your organization’s 401(k) plan, an audit is required. This doesn’t mean that all 120 employees have to participate in your retirement plan; they simply have to be eligible to contribute.
Once an audit has occurred, your plan must be audited every year going forward until the eligible employee number drops below 100. These are considered large plans. Retirement plans with fewer than 100 eligible employees, on the other hand, are considered small plans. Small plans do not require an audit.
There’s also the “80-120” rule to understand and consider, which states that if you happen to have over 100 participants but filed as a “small plan” in the previous year, you can again file as a small plan as long as you have under 120 eligible participants.
As far as timing goes, the Form 5500 filing deadline is seven months after the end of the month the plan year ends. Plans ending December 31st, for example, would have a filing deadline of July 31st of the following year.
It’s important for plan sponsors to understand the compliance rules that trigger an audit *before* it is time to file. Once the audit has been performed, audited financial statements of the plan, the audit report, and Form 5500 are filed together, to assure compliance with the necessary regulations.
### **Growing Companies Need to Think about Retirement Plan Audits *before* They Need One**
When it comes to retirement plan audits, planning is critical. If you are close to reaching that 120 number, you need to be planning for an audit, which can be a time-consuming and expensive process. Don’t wait until the last minute to plan.
We understand that determining 401(k) audit requirements can be complicated. If you’re unsure whether you need an audit of your retirement plan or not, please reach out to us. Our [assurance team](https://mgallp.com/assurance/) can be a valuable partner in your planning process.
**We are here to make the complex simple.**
[Let's talk!](https://mgallp.com/contact-us/)
---
### Stay Connected
Want to stay up to date with our latest blog posts, educational videos, webinars, and more? [**Subscribe for instant notifications**](https://blog.mgallp.com/subscribe-now-instant-notifications) and get new content delivered straight to your inbox.
Prefer a monthly roundup instead? [**Subscribe to our newsletter**](https://blog.mgallp.com/subscribe-now-monthly-newsletter) for valuable insights and resources from our team of experts, all in one place.
And be sure to [**follow us on social media**](https://blog.mgallp.com/follow-mga-on-social-media) for timely updates, expert insights, and exclusive resources to keep you in the loop.
February 13, 2020
Posted in [Assurance](https://blog.mgallp.com/tag/assurance), [Benefit Plan Audits](https://blog.mgallp.com/tag/benefit-plan-audits)
### Recent Posts:
[](https://blog.mgallp.com/maximizing-your-business-exit-how-to-prepare-for-a-profitable-sale-or-transition)
[Maximizing Your Business Exit: How to Prepare for a Profitable Sale or Transition](https://blog.mgallp.com/maximizing-your-business-exit-how-to-prepare-for-a-profitable-sale-or-transition)
[](https://blog.mgallp.com/staying-true-to-our-roots-why-mga-prioritizes-relationships-over-mergers)
[Staying True to Our Roots: Why MGA Prioritizes Relationships Over Mergers](https://blog.mgallp.com/staying-true-to-our-roots-why-mga-prioritizes-relationships-over-mergers)
[](https://blog.mgallp.com/feeling-overwhelmed-by-the-professional-grind-leadership-lessons-to-help-you-make-the-most-of-2024)
[Feeling Overwhelmed by the Professional Grind? Leadership Lessons to Help You Make the Most of 2024](https://blog.mgallp.com/feeling-overwhelmed-by-the-professional-grind-leadership-lessons-to-help-you-make-the-most-of-2024)
[](https://blog.mgallp.com/thinking-of-selling-your-great-business-put-mga-on-your-power-house-prep-team)
[Thinking of Selling Your Great Business? Put MGA on Your Power-House Prep Team](https://blog.mgallp.com/thinking-of-selling-your-great-business-put-mga-on-your-power-house-prep-team)
### Let's Connect
### [(713) 622-3960](tel:(713)%20622-3960)
600 N. Shepherd Drive, Suite 200
Houston, TX 77007
Miller Grossbard Advisors, LLP is an independent member firm of [PrimeGlobal](https://primeglobal.net/), an association of independent accounting firms. PrimeGlobal is one of the five largest associations of independent accounting firms in the world, providing a wide range of tools and resources to help member firms furnish superior accounting, auditing, and management services to clients around the globe.
Miller Grossbard Advisors, LLP places strong emphasis on maintaining the highest level of professional excellence. The Firm is a member of the Employee Benefit Plan Audit Quality Center. We maintain a rigorous quality control system to verify that our auditing practices follow both professional and Firm standards.
Copyright © Miller Grossbard 2026. All Rights Reserved. – [Privacy Policy](https://mgallp.com/privacy-policy/)
```json
{
"@context" : "https://schema.org",
"@type" : "BlogPosting",
"author" : {
"@type" : "Person",
"name" : "MGA Team",
"url" : "https://blog.mgallp.com/author/mga-team"
},
"dateModified" : "2026-06-08T23:58:33.029Z",
"datePublished" : "2020-02-13T15:00:00.000Z",
"headline" : "When Should Your Business Think About a 401(k) Audit?",
"image" : [ "https://blog.mgallp.com/hubfs/401(k)%20audit.jpg" ],
"mainEntityOfPage" : {
"@id" : "https://blog.mgallp.com/when-should-your-business-think-about-a-401k-audit",
"@type" : "WebPage"
},
"publisher" : {
"@type" : "Organization",
"logo" : {
"@type" : "ImageObject",
"url" : "https://blog.mgallp.com/hubfs/MGA%2035%20Logo.png"
},
"name" : "Miller Grossbard Advisors, LLP"
}
}
```