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Defense requires auditors to disclose disciplinary actions

Tammy Whitehouse | February 6, 2019

Audit firms are only days away from facing a U.S. Department of Defense requirement to provide information on disciplinary proceedings as a condition of winning audit contracts.

The Defense Department has not yet issued guidance on how it is interpreting language tucked into an appropriations bill that requires any accounting firm providing audit or audit remediation services to the DOD to disclose disciplinary proceedings against the firm or its auditors. With little specificity, the requirement is contained in a single paragraph of the National Defense Authorization Act for fiscal 2019, which was signed into law last August.

The Act does not fund the military, but it authorizes the policies by which funding will be set by appropriations committees. Section 1006, titled “Transparency of Accounting Firms Used to Support Department of Defense Audit,” says the provision takes effect 180 days...

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