A certification is the difference between an audit that tests your investment balances and one that does not. It is also the most confusing artifact in the whole engagement, and the one nobody documents.
The entity that signs it is frequently not the recordkeeper whose name is on your statement, but a trust company behind it. That distinction decides whether the certification is valid at all.
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The certification has to come from a bank, a similar institution, or an insurance carrier that is regulated, supervised and subject to periodic examination by a state or federal agency. A recordkeeper that is none of those cannot certify, though it usually holds the assets at a trust company that can.
The ERISA 103(a)(3)(C) audit, explained from the statute and SAS 136
With a valid certification the auditor may omit testing of the certified investment information. Everything else, contributions, distributions, loans, participant data, is tested exactly as it would be otherwise. The saving is real but it is confined to one area.
A certification that covers some assets and not others leaves the uncertified ones to be audited in full. A single self-directed brokerage window or a legacy annuity contract outside the certified statement can turn an engagement quoted as limited scope into a much larger one.
An unsigned certification, or one that does not identify the statement it attaches to, is not a certification. Check that the document names the plan, the period and the specific investment information, before the audit starts rather than during it.
Three things decide how the certification affects your audit: whether it arrives without asking, which regulated entity signs it, and what it covers. Almost nobody publishes the last two, which is why an auditor's first week is so often spent finding out.
A dot is not an answer, so here is every row in full. If you work at one of these recordkeepers and a row is wrong or missing, tell us and it goes in.
We have asked each of these and none of them publishes any of the rows on this page. They are listed rather than omitted because an empty row is a fact about the industry, and because somebody who works at one of them should be able to find their own name here.
A signed statement from a qualified institution confirming that the investment information it holds for the plan is complete and accurate. With one, the auditor may skip testing those investment balances, which is what the regulations call a 103(a)(3)(C) audit. It is the single biggest lever on what an audit costs.
Only a bank, a similar institution, or an insurance carrier that is regulated and supervised and subject to periodic examination by a state or federal agency. A recordkeeper that is none of those cannot certify, though it very often holds assets at a trust company that can. If you are unsure which entity is doing the certifying, that is the right question to ask.
Only the investment information it names. Contributions, distributions, loans, participant data and everything else are tested in full either way. A certification that covers some assets but not others leaves the uncertified ones to be audited normally, which is how an engagement quoted as limited scope turns into a much larger one.