DCAA is an agency that provides financial advisory and auditing services to DoD, and other entities related to Federal. It is responsible for the acquisition and administering of various contracts. DCAA has a vital role in government contracts since they are the ones used to provide multiple governmental agency financial oversights. They are critical in ensuring that DoD gets every monetary value from the massive amount of dollars spent on the overall defense contracts (Schaus, 2019). DCAA is governed and administered by the Security of Defense (Comptroller) and Chief Financial Officer (CFO). DCAA auditing and financial advisory services benefit both the army and the overall taxpayers since the organization works in ensuring that tax paid by various taxpayers has value and is not wasted. The primary activities of DCAA are to provide financial advisory and auditing services to various governmental agencies and organizations operating under the Federal Government. DCAA assists in determining whether specific contracts have allowable, reasonable, and allocable costs before they are initiated.
Role of DCAA
The primary purpose of DCAA is to provide various financial and auditing services to the United States Defense Department regarding the contract of acquisition. DCAA ensures high-quality auditing services to the Defense Department and ensures that the military personnel can acquire goods and services at affordable prices (Schaus, 2019). DCAA also has another role of performing various pre-award surveys, which they use to assess multiple contracts and determine whether they have financial capabilities to fund itself from the project inception stage to the completion stage. DCAA guidelines have been designed in such a way that contractors can easily understand the requirement needed to prepare a comprehensive and useful audit.
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Contractors Estimating and Accounting Systems
The main objective and goal of the accounting and the estimating system are to help in the determination of adequacy and suitability of firms considering an estimation system. The primary sources for accounting principles are inclusive of cost accounting, federal acquisition guidelines, and regulations, and other accounting principles. All these guidelines have been designed to regulate the actions of constructors. This accounting principle and federal guidelines provide guidelines to constructors, which prevent them from engaging in unethical accounting practices (Schaus, 2019). Accounting and estimation system is designed to help constrictors to provide correct pricing data. It is the role of contractors to be responsible for fixing various firms’ contract price data. The accounting principle helps in the initiation of different payment progresses.
Importance of DCAA
DCAA plays an essential role in the acquisition process of the defense department. DCAA ensures that taxpayers’ money is put into value and not wasted in unprofitable operations; DCAA achieves this monetary value determination by conducting regular audits (Schaus, 2019). All the checks carried out by DCAA are transparent and authentic, which ensures cost validity in the acquisition process.
Importance of the Accounting System
Accounting and estimation systems form a primary source of various cost data which is the primary data that any organization provides to the government for auditing purposes, the system also contains multiple pricing data regarding a given contract initiated in an organization (Schaus, 2019). Accounting Systems are also used as a determinant of the suitability of the accounting system used in a given organization.
In conclusion, we can justify that DCAA plays a vital role in ensuring that various contracts are financially stable since the organization has been mandated a position to carry out regular auditing services by the Federal Government. DCA plays a vital role in ensuring the fair prices of goods and services are according to military personnel. It is the role of any organization to ensure that its accounting and estimation system is functional since the accounting system is used to determine the financial capabilities and stability for various contracts. DCAA is a practical agency under the defense department that ensures that taxpayers' money is used correctly, which is ethical for the agency.
References
Schaus, J. (2019). Government Contracting - DCAA Audits. SSRN Electronic Journal . DOI: 10.2139/ssrn.2253026
Loeb, R. (2010). GAO vs. DCAA – And the Winner Is? …Contractors!. SSRN Electronic Journal . DOI: 10.2139/ssrn.1616299
Thomas, T. (2016). Motivating revisions of management accounting systems: An examination of organizational goals and accounting feedback. Accounting, Organizations And Society , 53 , 1-16. DOI: 10.1016/j.aos.2016.07.001
