How to Record DCAA Post-Award Audit Reserve
Establishing a contingent liability for potential price reductions resulting from a DCAA defective pricing audit.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Revenue Reduction - Audit Reserve | Contra-Revenue | 25,000.00 | - |
| Reserve for DCAA Audit Claims | Liability | - | 25,000.00 |
💡 Accountant's Note
If a post-award audit suggests a high probability of a price reduction under TINA, a reserve is established to match the potential loss to the period of discovery.
Practitioner & Systems Framework
💻 ERP Architecture
Record this as a top-side adjustment at the corporate level rather than at the project level to avoid skewing PM performance.
⚠️ Audit Flags
Material findings in a DCAA Draft Audit Report regarding cost or pricing data.
📄 Required Documentation
DCAA audit findings, legal counsel opinion, and internal TINA compliance review.
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