How Do I Navigate The DCAA Audit Process As A Government Contractor?

As a government contractor, the audit process can be intimidating and puzzling. It is crucial to be prepared for regular audits to ensure compliance with the Defense Contract Audit Agency (DCAA) requirements. Here are insights into the audit process.

Navigating the Audit Process as a Government Contractor

What is an Audit?

An audit involves examining a company's financial records and accounting procedures to check if they comply with Generally Accepted Accounting Principles (GAAP) or other regulations such as the Federal Acquisition Regulation (FAR). Government contract audits are typically conducted by the DCAA.

Preparing for an Audit

Preparation is the key to a successful audit. Review your accounting practices, financial records, indirect rates, timekeeping practices, and allocation of costs to ensure compliance with regulations. Make sure your financial records are accurate, up-to-date, and all transactions are properly documented. Review contract documents to verify compliance with all requirements and train employees on government contracting requirements.

During an Audit

The auditor will examine your financial records, accounting practices, and contract documents to ensure compliance with regulations. Work with the auditor to address any identified issues and maintain open communication throughout the audit process.

After an Audit

Once the audit is complete, review the auditor's report carefully and implement any necessary corrective action plans. Conduct a follow-up review to ensure compliance with regulations and work with your accounting team and legal counsel to address potential issues.Get Help with DCAA-Compliant Accounting


Peter Witts CPA PC, specializes in government contract accounting, helping you ensure that your accounting practices are compliant with applicable regulations. Stay prepared and confident with regular audits. 


I’m Kristin, the PWCPA PC Customer Success Specialist. For more information about this topic, or any other, you can always reach me through our customer ticketing system.