United States

Navigating Service Provider and Service Receiver Audit Readiness

Jun 26, 2014
From the Government Institute

In the ongoing journey to prepare auditable financial statements, the Financial Improvement and Audit Readiness (FIAR) Guidance, November 2013, establishes the Department of Defense (DoD) methodology for its components to achieve audit readiness by legislatively-mandated deadlines.

The desired outcome of DoD’s audit readiness initiative is the established capability to obtain an independent auditor’s unmodified opinion of full financial statements’ fair presentation. Activities geared towards achieving that outcome represent a "capability build-up" marked by incremental milestones, such as DoD reporting entity audit readiness assertions, audit readiness examinations, and audits of portions of the final statements.

Service provider/receiver audit readiness evaluations must be integrated into the process of building up department audit readiness capability because the department’s ability to achieve each of these milestones depends on the effective identification and evaluation of service provider/receiver relationships.

This KPMG Government Issue Brief was developed based on research into leading practices and lessons learned in supporting DoD audit readiness and sustainment initiatives of a variety of federal agencies, including some of DoD’s largest service receivers and providers, as well as auditing eight of the 15 cabinet-level federal agencies.