Not Sure if Your Accounting System is Compliant? Consider a Mock Audit
"Is my accounting system DCAA Compliant?" Usually, small businesses don’t ask themselves this question without an external prompt. That prompt usually comes from either the government itself or a potential new customer or job.
When the new job is a cost reimbursable type job, the customer inevitably will ask if the accounting system is compliant with government requirements. Sometimes they will even ask if the system has been audited by a Government agency (often the Defense Contract Audit Agency) and passed the audit.
If your company has been pursuing government contracts for years, you may likely already have a job cost accounting system set up to meet DCAA and FAR requirements. You may have even been “lucky” enough to have had an audit conducted of the system by the DCAA.
However, what if this is your first time? As a contractor, you are not allowed to request an audit from the DCAA, and they certainly don't show up at your door to help you setup your system. So, how do you know if your system is compliant with government requirements? What if you survived a DCAA audit, but it was several years ago and you're not sure the accounting system is still compliant?
Certainly, many companies just want to avoid the inconvenience or stress, assume that their system “must be” compliant, and leave it at that. Others—and we hear this more frequently than you'd think—decide that their accounting or financial background is all they need..."I've got this, right? How hard can it be?"
This assumption has caught many companies off guard and resulted in a failed audits. The consequences of a failed DCAA audit are very severe, and include withheld payments until the system is fixed, loss of business, or even negative impression of contractor so that future orders are put in jeopardy.
There is a way for companies in this situation to mitigate their risk. ReliAscent can perform a “mock audit” of the company’s system to verify, with a high degree of certainty, that it meets the FAR and DCAA requirements. This can be very useful, especially if the system needs a little tweaking (the difference between passing and failing) prior to an actual DCAA audit.
Our experts can identify problem areas and help you fix these problems prior to the DCAA audit, thereby mitigating the risk of failure.
Contact ReliAscent today to learn more about our Mock Audit, and DCAA compliant accounting services.