Download Free A Survey Of Financial Reporting And Accounting Practices Of Government Contractors Book in PDF and EPUB Free Download. You can read online A Survey Of Financial Reporting And Accounting Practices Of Government Contractors and write the review.

GAO proposed legislation to study the profitability of government contractors and: (1) require major government contractors to annually report financial results to an official designated by the President; (2) define criteria for determining which companies will be subject to reporting requirements; and (3) create a Department of Defense (DOD) Profit Reporting Program. GAO believes the program should require: (1) a consistent methodology to evaluate profitability; (2) a means to establish the reliability of contractor-furnished data; and (3) mandatory contractor participation. GAO found that contractors and agencies remain opposed to the program because they believe that: (1) DOD ad hoc studies of contractor profitability would be adequate; (2) the costs of the study would outweigh the benefits; and (3) the government could not adequately protect proprietary information.
This dissertation examines the association between government contracting and financial reporting issues. I define government contracting companies to include any company awarded a U.S. federal government contract in the current year. I examine two research questions related to these companies. In the first study, I investigate whether contracting with the federal government is associated with the likelihood of reporting material weaknesses in internal control over financial reporting. Government contracting has distinct laws, regulations, and monitoring activities not common to commercial contracts. I hypothesize that these institutional features create opposing influences on the effectiveness of companies' internal control over financial reporting because the government contracting setting influences both the existence and detection of internal control problems. I find that government contracting is negatively associated with the likelihood of reporting a material weakness in internal control over financial reporting and that government contracting companies are more likely to remediate a material weakness in the following year. Collectively, these findings suggest that the government contracting setting is associated with the effectiveness of internal control over financial reporting. In the second study, I investigate whether disaggregating revenues based on contract characteristics is useful to investors. Beginning in 2018, the Financial Accounting Standards Board will require companies to disclose disaggregated revenues based on customer contract characteristics. This disaggregated information could be useful if revenues associated with different contract characteristics are also associated with differential company performance or value. I use existing data on the contracts of companies that have been awarded at least one government contract to test this assertion. The results show that in several cases contract characteristics are useful in identifying differences in the persistence of company performance. Also, I find that certain contract characteristics can influence the pricing of earnings and are associated with the presence of an unrecorded intangible asset. These findings provide ex ante evidence on the usefulness of this yet-to-be implemented accounting standard, suggesting that disaggregated revenue disclosures have the potential to provide relevant information to investors.
Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.