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Title: Evaluating the Impacts of Federal Improvement and Audit Readiness (FIAR) Compliance
Authors: William Lucyshyn, Dylan Hunt
Keywords: Financial Improvement and Audit Readiness
cost accounting standards
Issue Date: 21-Oct-2021
Publisher: Acquisition Research Program
Citation: Published--Unlimited Distribution
Series/Report no.: Financial Management;UMD-FM-22-002
Abstract: Over the last thirty years, the Department of Defense slowly became compliant with the CFO Act of 1990, which required federal agencies to undergo an annual financial audit. In 2018, the DoD finally completed its first audit and continued this trend in 2019. This paper seeks to understand the benefits of producing auditable financial statements, their costs, and any impacts on DoD’s acquisition system. We describe the several forms of accounting and review the academic accounting literature that examines the value of audits. We describe DoD’s preparation for, and analyze the results of, the three completed audits to look more broadly at the benefits. These include uncovering previously unaccounted inventory and improvements to internal accounting systems; even as no instances of massive waste or fraud were identified. We review the criticisms of financial accounting and audits and finally, the utility of management cost accounting is discussed.
Description: Financial Management
Appears in Collections:Sponsored Acquisition Research & Technical Reports

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