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How to Prepare for a DCAA Audit?

Are you wondering how to prepare for DCAA audit or any type of government audit? If so, you should consider some areas to start preparing for a government audit.

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How to Prepare for a DCAA Audit?

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  1. 2017 How to Prepare for a DCAA Audit?

  2. Are you wondering how to prepare for DCAA audit or any type of government audit? If so, you should consider some areas to start preparing for a government audit. It’s important to know that there are several types of audits that the Defense Contract Audit Agency (DCAA) performs. But, most of the audits are divided between the period before the contract award and the period after the award. Let’s understand them. Before a contract award, you should: Determine the adequacy of your DCAA Accounting System Audit. Examine your Contract Price Proposal for fairness before contract negotiations; Examine your Forward Pricing Rate Proposal. After a contract award, you should: Examine your background costs to determine annual indirect cost rates Examine Provisional Billing Rate Proposals; Examine your claims in the event of contract terminations. If you prepare adequately for a DCAA Audit, you will be able to achieve better results for Contractor and all personnel engaged in this process.

  3. Follow the below points to prepare for the audit: Evaluate notification of the auditor that an audit will be performed; Make sure you understand what the auditor will accomplish Ensure what auditor may ask for such as records, reports, operations data, and management assertions; If you have any questions, ask for the clarification Try to meet the auditor's schedule for the entrance conference Be available for the initiation of the audit (at small contractors, the entrance conference and initiation of the audit may be on the same day); Don’t agree to an onsite visit date if you are unable to meet the auditor’s needs Make arrangements for necessary workspace

  4. You may also need to have some of the data depending on the audit purpose. The data includes: Your organization financial statements Historical incurred cost from the general ledger Cost Proposals like estimates or indirect rate calculations Employee handbooks Accounting Policy and Procedure. To be able to prepare for DCAA audit, you should seek the help of a professional financial consulting firm. Experts can help you in all the formal approach such as evaluating current status, identification of weaknesses, assignment of tasks, and management of the process. Further, they have experience working with Government auditors. So, they can help you well-prepared for the DCAA audit.

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