Internal controls over financial reporting
Internal controls over financial reporting in Defense and Government Contracting sit at the intersection of two distinct oversight regimes: the U.S. Securities and Exchange Commission's accelerated ICFR attestation requirements under Sarbanes-Oxley Section 404, and the Defense Contract Audit Agency's cost accounting and billing controls framework that runs parallel to it. Contractors operating as SEC registrants face dual exposure, where a material weakness disclosed to the Commission can simultaneously trigger DCAA audit scrutiny of the same underlying control environment. That gap between the two frameworks is where most enforcement risk quietly accumulates.
Watch
- DCAA's 2023 audit guidance tightening review of contractor ERP control environments
- SOX Section 404(b) auditor attestation thresholds and whether your entity qualifies as an accelerated filer
- False Claims Act exposure tied to ICFR failures on cost-type contract billing
- SEC staff comment letters targeting ICFR disclosures in defense sector 10-K filings
Recent material activity in Defense & Government Contracting
Active monitoring in place across Defense & Government Contracting. Material developments related to internal controls over financial reporting will appear here as they are published.