The Defense Contract Audit Agency (DCAA) is a federal agency that audits and provides financial advisory services to the Department of Defense (DoD) and other federal agencies. The DCAA‘s mission is to “protect the interests of the United States government by providing independent auditing, accounting, and financial advisory services that promote economy, efficiency, and effectiveness in the DoD contracting process.” DCAA compliance is important for government contractors because it helps to ensure that they are not overcharging the government for their goods or services. It also helps to ensure that the government is getting the best value for its money.

DCAA compliance is the process of ensuring that a company’s accounting, financial, and timekeeping systems are in compliance with the government’s Job Cost Accounting regulations found in the FAR, and that they follow the DCAA‘s guidance and recommendations.

There is no such thing as a DCAA-approved accounting system. The DCAA does not officially approve any accounting systems—it merely audits a company’s financial systems to determine if they are compliant.