Under the new provisions, DoD contractors may present and the Defense Contract Audit Agency shall accept without performing additional audits, a summary of audit findings prepared by a commercial auditor if
- the auditor previously performed an audit of the allowability, measurement, assignment to accounting periods, and allocation of indirect costs of the contractor; and
- such audit was performed using relevant commercial accounting standards (such as Generally Accepted Accounting Principles) and relevant commercial auditing standards established by the commercial auditing industry for the relevant accounting period (presumably this means audits conducted according to GAAS (Generally Accepted Auditing Standards) and not according to GAGAS (Generally Accepted Government Auditing Standards) or "Yellow Book" audits).
Further, Sec 820 states that DCAA may audit direct costs of DoD cost contracts and shall rely on commercial audits of indirect costs without performing additional audits, except that in the case of companies or business units that have a predominance of cost-type contracts as a percentage of sales, DCAA may audit both direct and indirect costs.
Tomorrow we will conclude this series on Sec 820 with a few miscellaneous provisions and comments.