Home > Certification (CDFM) > CDFM Modules > Module 3 – Accounting and Finance > Auditing


This area deals with the financial manager's knowledge of Comptroller General Standards (GAO Yellow Book), Federal Generally Accepted Accounting Principles, DoD policies and procedures, documentation requirements, reporting requirements, audit program development criteria, frequency of review criteria and requirements and constraints on services other than audits.
You will need to become familiar with types of government audits (financial and performance); audit general standards, fieldwork standards, and reporting standards; and audit requirements particular to the Department of Defense. You will also need to understand the concept of internal controls.
The DoD auditing community conducts audits in accordance with government wide standards contained in a 108 page publication – known as the "Yellow Book" because of its bright yellow cover. The Yellow Book, published by the U.S. General Accounting Office, is actually entitled Government Auditing Standards, 1994 Revision. These standards are broad statements of an auditor's responsibilities, and the document outlines types of government audits, general standards, field work standards, and reporting standards. The Yellow Book is on line at http://www.gao.gov/govaud/ybk01.htm.
The Office of Inspector General, Department of Defense (DoDIG), is responsible for conducting audits and investigations within the DoD, DoDIG audit policies and procedures are contained in DoD 7600.7, Internal Audit Manual, October 1999. The Military Departments also have internal audit functions, but the CDFM examination will not include material relating to department-specific policies and procedures.
Audit is an essential element of the DoD financial community. Further, since passage of the Chief Financial Officers (CFO) Act in the early 1990s, the audit role has expanded in financial areas with emphasis on financial system internal controls and the accuracy of products generated by those systems. With this expanded audit coverage, many financial personnel will experience audits. As such, it behooves all DoD financial employees to better understand the audit role and tools auditors apply in accomplishing their audits.
In preparing for the audit portion of the Defense Financial Management Certification examination, candidates will better understand the auditor's role in the financial process, governing audit guidance that explains why auditors do what they do and audit techniques that have direct application with the entire financial community. For example, financial employees benefit when they increase their understanding of internal controls and how those controls relate to their respective functional areas.
 Test Study Preparation References
Title Study Notes
Generally Accepted Government Audit Standards http://www.gao.gov/govaud/ybk01.htm
 GAO Yellow Book  http://www.gao.gov/govaud/ybk01.htm
DoD 7600.7M DoD Internal Audit Manual  http://www.dtic.mil/whs/directives/corres/html/76007m.htm


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