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:
- Audit Response – Establishing an audit response infrastructure of processes and tools to promote efficiency in responding to auditor requests
- Audit Remediation – Helping analyze the NFRs to develop and prioritize corrective action plans and implementing those plans to create enduring solutions
- Audit Sustainment – Focusing on key management processes to help maintain improvements from remediation, while continuing to respond to findings from internal reviews