With the number of requirements and guidelines constantly growing for audits, security, and regulatory compliance – organizations have a lot to manage. Small to large businesses, and especially government contractors need to continuously improve internal controls and processes to stay one step ahead in any industry. Maintaining compliance throughout the entire contract lifecycle is the key to a successful business in government contracting.
Effective audits are an important aspect of advancing your business; they allow for increasing value in processes, mitigating risks, and maintaining customer and client confidence. However, audits will always be an unavoidable part of the business process whether they’re required by regulatory bodies, financial institutions, or by investors and clients. Audit preparation can be a bit overwhelming, and things can derail rather quickly without a strategic plan in place or an internal team on standby.
Preparing an Audit Plan
How can you efficiently and effectively prepare for an audit of your accounting system? First, organizations will want to make sure their systems and infrastructure are fully compliant with all the current accounting requirements set forth by their industry regulations. For a small to medium-size business, even this first step can be a lengthy endeavor, but there’s always a good reason to prepare. Some reasons for audits include fulfilling contractual obligations, ensuring fair and reasonable pricing on a federal proposal, and identifying potential internal control deficiencies to name a few.
For accounting system audits, contractors should begin with understanding the requirements of an adequate accounting system. Since government contract audits are normally performed by DCAA, it would be useful to review the multiple auditing programs and their guidelines from the DCAA website at www.dcaa.mil. These programs are an extremely useful tool in preparing for an audit of this type, whether this would be an internal or external audit.
Developing an Audit Framework
Once you have prepared an audit plan, it’s time to develop a scalable framework to track the progress and timely remediation of any audit findings. As with any audit, there should be a process in place to quickly correct any significant findings, so they aren’t ignored or repeatedly go unaddressed. Internal audits should include assistance with implementing controls that impact financial management and suitable training for management and staff.
In addition to having an audit plan and process framework in place, organizations also need to collaborate with management and set up a platform capable of monitoring and addressing any financial reporting, accounting, and regulatory changes to ensure ongoing compliance throughout operations. This also includes training of staff to keep them current on the newest regulations and accounting trends.
Juggling all these pieces for a small or medium-sized business can be quite a burden, as many lack the resources needed to have a dedicated team and internal audit function. Effectively managing a compliant audit framework requires a cross-functional collaboration between operations, legal, compliance, financial reporting, internal audit, accounting, and tax teams.
Tenace: Your Auditing Solution
Whether you’re preparing for a big company audit or specialized internal audit, our team has the knowledge and throughput to make it a success – every time. Our financial team is invested in your organization and committed to delivering comprehensive audit support for commercial and government contractors of any size.
Some of our audit support services include:
- Liaison between auditor and management
- Technical research and regulatory guidance
- Supporting documentation
- Maintaining internal control frameworks
- Infrastructure optimization
Our clients range in size from sole proprietors to publicly traded corporations, and we provide a wide array of services designed for any government contractor to maximize their revenues while maintaining compliance throughout every audit. You can contact us any time and one of our team who can help you determine if our audit support services are a good fit for your organization.