DCAA Peer Review: System Review Report

Abstract

We have reviewed the system of quality control for the Defense Contract Audit Agency (DCAA) in effect from January 1, 2013, through June 30, 2013. DCAA's last peer review included its system of quality control for the fiscal year ending September 30, 2006. The last peer review opinion was a pass. Government Auditing Standards require a peer review every 3 years. However, in September 2009, the Government Accountability Office (GAO) issued the report, DCAA AUDITS: Widespread Problems with Audit Quality Require Significant Reform, which identified audit quality weaknesses such as the compromise of auditor independence, insufficient audit testing, and inadequate planning and supervision. To address the recommendations in the 2006 peer review report and GAO report, DCAA made substantial changes. These included increasing its internal review structure, providing staff training, and reviewing and revising its audit policy where needed. In addition, DCAA restructured the way it accepted audits and changed its overall audit strategy to focus on high-risk and high-dollar areas.