Virtual Workshop B — Understanding the Definition and Impact of Materiality for Incurred Cost Audits
At the request of Congress in the FY18 National Defense Authorization Act, the Section 809 Panel developed numeric materiality guidelines applicable to audits and oversight of contractor costs. DCAA recently rolled out new audit guidance to adopt and implement them (a year sooner than Congress mandated). Your presenters will share their perspectives on what they mean to the government contracting community. Key takeaways from this workshop will include a better understanding of:
- Why clearer materiality guidance was needed?
- The concept of materiality, including qualitative (nature) vs. quantitative (amount) considerations
- How materiality is applied throughout the audit (planning, performance, reporting)
- How materiality is applied to direct vs. indirect costs
- Material vs. immaterial non-compliances, their effect on audit opinions, and how they will be communicated to contracting officers
- How the new guidance may affect DCAA audit teams, contractors, and contracting officers