Today we continue our week-long series on helping you understand some of the terminology used by auditors, particularly Government contract auditors. These auditors, like any profession, have their own manner of specialized speaking. Today we look at the terms "Uniformity" and "Consistency".
At first blush, it seems like the words uniformity and consistency are synonyms. They could be under some circumstances but these terms have very precise meanings when it comes to cost accounting.
Uniformity relates to comparison of two or more accounting entities. The FAR Councils' and the CAS Board's objective in this respect is to achieve comparability of results of entities operating under like circumstances. While everyone recognizes the impracticality of defining or attaining absolute uniformity, largely because of the problems related to defining like circumstances, the Government will nonetheless, seek ways to attain a practical degree of uniformity in cost accounting practices. This is evidenced in practices related to depreciation or pension plan valuations.
Consistency pertains to the use by one accounting entity of compatible cost accounting practices which permit comparability of contract results under similar circumstances over periods of time. Essentially, consistency relates to the allocation of costs, both direct and indirect, and to the treatment of cost with respect to individual cost objectives as well as among cost objectives in like circumstances. Auditors typically pick up inconsistencies in cost accounting practices within an organization very quickly and when they do, they will make an assessment as to whether the Government's interests are harmed as a result.