According to the 2021 Thales Data Threat Report, over 42% of American companies fell victim to a data breach and a reported 20% of defense contractors believe they are at risk for ransomware attacks. Data security has quickly become a major concern for American companies as cybersecurity threats become more adaptive and malicious.
In response to the growing threat of cybersecurity attacks, American government agencies are enforcing regulations to ensure all sensitive information is managed with security requirements. Government contractors are encouraged to recruit the expertise of DFARS-experienced CPAs to navigate the complex rules and regulations, including federal and state requirements.
In our article, we explain the details of DFARS compliance and how a CPA can help your organization’s accounting system meet regulatory requirements.
What Exactly Is Defense Federal Acquisition Regulation Supplement (DFARS)?
Also called “Defense Federal Acquisition Regulation Supplement,” DFARS includes a range of cyber security rules and regulations defense suppliers and contractors must follow to obtain new DoD (Department of Defense) contracts.
The measures required to protect Covered Defense Information (CDI) and Controlled Unclassified Information (CUI) have become more intense for contractors and other nonfederal information systems working within the central government.
Should a contractor fail to remain compliant, it may result in contract loss, fines, and being banned from further government contracts. Working with a professional CPA that is well-informed and educated in DFARS compliance can prevent your organization from losing these DOD contracts.
How Can CPAs Help Meet And Maintain Requirements For DFARS?
DFARS compliance requirements are relatively straightforward. The Department of Defense (DOD) contractors need to provide added security to protect Controlled Unclassified Information CUI which includes government-owned or created data that travels through or resides in information systems.
These requirements help prevent unauthorized people from illegally accessing, manipulating or disclosing CUI. In addition to protecting data, DoD contractors should also report security breaches and other IT-related incidents timely and work with the DoD to combat such incidents. The process includes giving the DoD access to affected media.
A series of laws and regulations governing CUI in nonfederal systems and organizations, outlined in NIST 800-171, presents 14 categories to become DFARS-compliant.
Government contractors must perform readiness assessments and provide objective evidence addressing all essential requirements to ensure DFARS compliance.
Looking for a credible agency to help you become DFARS compliant? Look no further! Diener & Associates provides reliable DFARS compliance solutions, including accounting systems audits and work process reviews to determine risks that may penalize your company.
They help administer improvements so your business gains compliance and applies a more robust, government-approved, and certified accounting system to prove you can procure DoD government contracts.
Listed below are major categories that every contractor handling CUI should address to become DFARS-compliant:
Awareness & Training
This protocol addresses awareness of various security risks and the training for procedures and standards to perform accounting duties and responsibilities.
Organizations can work with their CPA to evaluate whether staff members are properly managing sensitive data. With proper reforms, organizations are empowered to implement a more secure, government approved-accounting system.
Audit & Accountability
This protocol demonstrates how Syslogs (system logs) offer valuable records. It includes the creation, protection, retention and review of Syslog, offering helpful feedback to information systems.
CPAs can help contractors audit the information moved throughout the organization and in between its systems to make sure data is following the appropriate classification. Refining an organization’s auditing reinforces accountability with data handlers and helps identify violations before they can lead to a security breach.
Organizations are required to consistently evaluate operational risks in the transmission, storage and processing of CUI. A CPA can help simplify the assessment of an organization’s accounting system and help identify whether cybersecurity measures are checked, and operations and personnel are verified.
Monitor, manage and analyze vulnerabilities and deficiencies in the documentation and reporting of sensitive data in information systems. CPAs will continue to routinely test whether processes and procedures are effective and productive, and prescribe best practices and other improvements if required.
Contact A Professional CPA
DFARS compliance requires DoD contractors and others to establish robust security measures for their existing information systems along with the data they process, move and store.
For organizations looking to acquire government contracts for the first time, the prospect of meeting DFARS compliance can be intimidating. Organizations that are currently working with the industry are also burdened with the growing requirements and maintenance of compliance. This is where working with a DFARS-experienced CPA can ensure nothing falls through the cracks and everything is operating as it should for DFARS compliance.
Contact Diener & Associates if you are preparing for compliance or are seeking a government contract.
With our assistance, you can easily identify areas for improvement in financial bookkeeping or business processes to meet DFARS regulations. We can help you become DFARS compliant and also achieve future government contracts, leftover payments and more.