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A significant period of time has elapsed since the publication in 1975 of the Audits of Government Contractors. In the interim, the pace of change in both the government contracts process and financial reporting requirements has accelerated, thus increasing the need for further guidance. Therefore, the guide has been revised to assist independent accountants in examining and reporting on financial statements of government contractors. The government contracts environment grows more complex with the addition of each new statute and regulation, and the significant rate of change in those regulations requires constant attention and guidance to remain current. Furthermore, effective application of the regulations in a given circumstance requires extensive knowledge of the regulations, cases interpreting the regulations, and relevant guidance for implementation. Both business persons and accounting professionals associated with financial reporting of government contractors should understand the legislative and regulatory requirements as well as the business risks unique to government contractors. The government contracting process generates additional risks through the funding and review processes. The application of this guide is unique because the government purchases all types of goods and services and, consequently, affects a wide variety of industries. Furthermore, government contract rules and regulations apply to both contracts and subcontracts and prime contractors and subcontractors. The objectives of this guide are to provide (1) a general background of the environment and (2) practical guidance to independent accountants on the accounting, auditing, and financial reporting for government contractors. In addition, the guide: 1. Identifies relevant regulations and professional accounting pronouncements and summarizes key provisions of those regulations and pronouncements. This includes government contract, SEC, financial reporting, and tax accounting requirements. 2. Describes the fundamental activities in the government contracts process. 3. Describes the business and operating risks and their effects on the audit and reporting processes. 4. Identifies auditing and financial reporting issues and describes the prevalent practices. 5. Provides a glossary of terms and an annotated bibliography for reference.
Public contracts -- United States -- Auditing
Accounting | Taxation
American Institute of Certified Public Accountants. Government Contractors Guide Special Committee, "Proposed audit and accounting guide : audits of government contractors ;Audits of government contractors" (1987). Statements of Position. 511.