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The FIAR Directorate ensures that DoD-wide financial improvement efforts continue to mature and are integrated with transformation activities across the Department. Among its responsibilities, the FIAR Directorate develops and issues detailed financial improvement and audit preparation methodologies and guidance, also known as the FIAR Guidance.
The FIAR Guidance serves as a standard reference guide for existing and new users involved in all audit readiness initiatives across the Department. It provides instructions for implementing a consistent, Department-wide plan for achieving the Department’s financial improvement and audit readiness objectives. In addition to defining the Department’s goals, priorities, strategy, and methodology for becoming audit ready, the Guidance details the roles and responsibilities of reporting entities and service providers, as well as the processes they should follow to achieve audit readiness. The FIAR Directorate periodically updates the guidance to ensure it remains current with the Department’s priorities and aligns with all applicable Federal and Departmental financial management requirements.
The FIAR Strategy has been honed over the past few years and continues to provide a critical path for the Department. While initially seeking to balance the need to demonstrate short term accomplishments (Wave 1) against the long-term goal of achieving an unmodified opinion on the Department's financial statements (Wave 4), the FIAR Strategy has evolved to ensure consistency with OUSD(C)’s expanded priorities and focus improvement work on budgetary information, proprietary accounting data and information, mission critical asset information, and valuation.
The graphic below depicts the FIAR Strategy. For details on specific critical tasks and milestones each reporting entity must achieve, please refer to Appendix F (ODOs) and Appendix G (Services).
The FIAR Methodology (Methodology) provides a step-by-step approach to achieving improved financial information and audit readiness. Reporting entities should focus their audit readiness efforts on improving their processes, controls, and related documentation based on the results of the application of the Methodology.
The Methodology contains phases and key tasks for achieving improved financial information and audit readiness. The phases and key tasks, which can be applied uniformly regardless of the size, materiality, or scope of an assessable unit, are as follows:
As they execute the Methodology, reporting entities are responsible for meeting interim milestones, which are described in Appendix F (ODOs) and Appendix G (Services). The FIAR Directorate will provide on-going feedback to the reporting entities to ensure the Department stays on track towards meeting its audit readiness objectives. Independent auditors will be engaged to perform financial statement audits or audit readiness examinations in conjunction with the Appendix F and Appendix G timelines.
Financial Reporting Risks, Outcomes, Key Supporting Documents, and Suggested Test Procedures
The April 2015 FIAR Guidance, Section 5, identifies “Financial Reporting Risks,” “Outcomes Demonstrating Audit Readiness,” “Key Supporting Documents,” and “Suggested Test Procedures” for individual financial statement line items. Section 5 focuses on beginning balances in the Statement of Budgetary Resources (SBR), as well as the proprietary statements: Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position. The tables below provide links to each of these areas in the FIAR Guidance.
About FIAR Guidance
FIAR Guidance, April 2015
Tools, Templates, and Workproducts
FM Online (CAC Restricted)
Services Audit Readiness Websites