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Congressional mandate requires the Department of Defense (DoD) to produce audit-ready financial statements. In response, DoD has focused the financial community on preparing a limited set of financial statements for audit. Unfortunately, this approach may not prepare organizations for full-scale audit activities, which can impact day-to-day operations across an organization long after the audit is complete.
Such preparation requires more than accounting and financial expertise—domain understanding of an organization and its mission is needed. Audit outputs—such as addressing notifications of findings and recommendations (NFR) will take organizations time and resources to develop, and responding to corrective action plans will place additional demands on an already-busy workforce. As such, financial leaders should look beyond individual NFR responses to emphasize a holistic perspective across processes, systems, and workforce development.
To manage this effectively, Booz Allen groups audit activities into three areas:
“Financial leaders should look beyond individual responses to an audit, and instead emphasize a holistic perspective across processes, systems, and workforce development.”
Auditability is about much more than just financial management and compliance. Operational commanders and leaders who align audit actions with their mission priorities can build long-term solutions that reduce future audit demands while benefiting their mission. Specifically, progress towards a clean audit means commanders and leaders get better situational awareness of their dollars and assets, have more confidence in their data for faster decisions on allocating those resources, and ultimately make more effective use of their resources to improve their mission readiness.
Auditability is about much more than just financial management and compliance. Operational commanders and leaders who align audit actions with their mission priorities can build long-term solutions that reduce future audit demands while benefiting their mission.