Reston, Virginia – October 13, 2026 – PRESSADVANTAGE –
Eubanks Accounting & Advisory has released an operational compliance advisory aimed at helping government contractors and defense sector businesses prepare for approaching fiscal year-end audits while maintaining strict adherence to Defense Contract Audit Agency (DCAA) standards. The advisory arrives as many contractors enter the period of heightened scrutiny that accompanies fiscal close, when documentation gaps and accounting inconsistencies are most likely to surface.
The advisory identifies several recurring issues that tend to draw auditor attention during fiscal close. Among the most common are improper direct versus indirect cost allocation, inadequate tracking of unallowable expenses, flawed timekeeping practices, and labor distribution inconsistencies. Each of these areas, according to the firm, can trigger findings that lead to contract payment delays and place continued federal contracting eligibility at risk.
To reduce exposure before formal audits begin, the advisory outlines a series of steps that leadership teams can execute in advance. These include conducting pre-close internal reviews, reconciling job cost ledgers, verifying internal controls, and confirming alignment with Federal Acquisition Regulation (FAR) standards. The firm notes that early action in these areas supports uninterrupted cash flow and helps contractors avoid the disruptions that often accompany late-stage audit findings.
“Fiscal year-end is the point at which small bookkeeping habits turn into audit findings,” said Jennifer Eubanks, a representative of Eubanks Accounting & Advisory. “Contractors who treat the weeks before close as a time for internal review, rather than waiting for an auditor to raise questions, tend to move through the process with far fewer surprises. The goal is to identify and correct inconsistencies while there is still time to document them properly.”
The advisory places particular emphasis on timekeeping and labor distribution, areas that DCAA examiners routinely review in detail. Inconsistent records between recorded hours and labor charges can undermine the integrity of an entire cost submission, even when the underlying work is legitimate. The firm advises contractors to verify that timekeeping policies are consistently applied across the organization and that labor costs are distributed in a manner that withstands review.
Cost allocation represents another focal point. Misclassification of direct and indirect costs remains one of the more frequent sources of audit questions, and the advisory recommends that contractors reconcile their job cost ledgers and confirm that allocation methods are documented and consistently applied throughout the fiscal year.
“Audit readiness is not a single event. It is the result of records that have been maintained correctly throughout the year,” Eubanks said. “When leadership teams reconcile their ledgers and confirm their internal controls ahead of close, they protect both their cash flow and their standing as a federal contractor.”
The firm indicated that the advisory is intended as a practical reference for contractors navigating the fiscal close period and the compliance obligations that accompany federal work.
Eubanks Accounting & Advisory provides accounting and advisory services to government contractors and businesses operating in the defense sector. The firm focuses on DCAA compliance, cost accounting standards, and financial practices aligned with federal contracting requirements, assisting clients in maintaining audit readiness throughout the fiscal year.
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For more information about Eubanks Accounting & Advisory, contact the company here:
Eubanks Accounting & Advisory
Jennifer Eubanks
844-663-7260
info@eubanksaccounting.com
1920 Association Dr Ste 102
Reston, VA 20191
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