ACO CORB LATEST 2026 EVALUATION TEST QUESTIONS
AND SOLUTIONS GUARANTEE A+
✔✔When is a disclosure statement required? - ✔✔A Disclosure Statement is required
for each business unit selected to receive a CAS-covered contract or subcontract of $50
million or more, or when the company, together with its segments, received net awards
of CAS-covered contracts and subcontracts totaling $50 million or more in its most
recent accounting period.
✔✔What are the 2 types of CAS coverage? - ✔✔a. Full; same applicability as
Disclosure Statement requirements
b. Modified; applies when a company receives a SINGLE CAS covered contract but less
than $50M in total CAS covered contracts.
✔✔What is the difference between Full and Modified CAS coverage? - ✔✔a. Full
coverage requires the contractor to comply with all cost accounting standards in effect
on the date of contract award. This coverage is required if the contractor receives a
single CAS-covered contract award of $50 million or more or receives $50 million or
more in net CAS-covered contract awards in its preceding cost accounting period.
b. Modified coverage only requires the contractor to comply with certain cost accounting
standards such as estimating, accumulating, and reporting costs; allocating costs
incurred for the same purpose; accounting for unallowable costs. Modified coverage
may be applied to a covered contract of less than $50 million awarded to a Business
Unit that received less than $50 million in net CAS-covered contract awards in the
immediately preceding cost accounting period. However, if the business unit receives a
contract for more than $50 million, that contract and all subsequent CAS-covered
contracts must be subject to Full Coverage. Modified coverage also applies to contracts
and subcontractor with foreign governments or their agents. A contract awarded with
modified CAS coverage shall remain subject to such coverage throughout its life
regardless of changes in the business unit's CAS status during subsequent cost
accounting periods.
✔✔What CAS standards must contractors under modified coverage comply with? -
✔✔a. 401 - Consistency in Estimating, Accumulating and Reporting Costs
b. 402 - Consistency in Allocating Costs Incurred for Same Purpose
c. 405 - Accounting for Unallowable Costs
d. 406 - Cost Accounting Period
✔✔The Contractor submitted a description of an accounting change on October 1,
2010. The contractor plans to implement the change on December 1, 2010. The
Contractor did not request the ACO to deem the change a "desirable" change. The ACO
received DCAA's audit on the subject change. In the audit report, DCAA says: Results
of Audit: In our opinion, the subject revision adequately describes the contractor's
revised cost accounting practices. The practices, as described, comply with applicable
Cost Accounting Standards, and FAR Part 31. In our opinion, the cost impact of the
,accounting change is immaterial. What should the ACO do next? - ✔✔a. The contractor
submitted the description of the change 60 days prior to implementation - good
b. This would be classified as a unilateral change
c. Evaluate the description of the change for adequacy and compliance along with any
supporting data asserting cost impact is immaterial
i. If it IS NOT adequate - notify contractor in writing and request revised description
d. If it IS adequate - check if change is CAS-compliant
i. If it IS NOT CAS compliant - Notify contract in writing
e. If the change IS CAS Compliant, check if the cost impact is immaterial.
i. It the change is NOT immaterial -
f. If the ACO agrees with DCAA's audit of the change being immaterial, the ACO makes
a written adequacy and compliance determination that the cost impact of the accounting
practice change is immaterial and the business function is complete.
g. ACO writes a MFR for the supervisor explaining the change is adequate, compliant,
unilateral, and the cost impact is immaterial (All documented in AIT)
✔✔The contractor submitted an accounting change and did not ask the ACO to view as
a desirable change. The ACO received DCAA's audit and said it adequately complies.
What do you do now? - ✔✔a. Adequately complies - The change adequately describes
the contractor's revised accounting practice and the practice complies with applicable
Cost Accounting Standards and FAR Part 31.
b. Did DCAA determine any materiality? If NO, then the ACO requests the contractor to
submit a General Dollar Magnitude (GDM) proposal, unless the ACO determines the
impact to be immaterial.
c. ACO can request contractor to identify all affected CAS-covered contracts and subs.
d. After evaluating GDM, ACO can determine immateriality; negotiate and resolve;
request a revised GDM; or request submittal of a Detailed Cost Impact (DCI) proposal.
✔✔What criteria are used to make a materiality determination? - ✔✔a. 3.4.5.4.1. The
absolute dollar amount involved
b. 3.4.5.4.2. The amount of contract cost compared with the amount under
consideration.
c. 3.4.5.4.3. The relationship between a cost item and a cost objective
d. 3.4.5.4.4. The impact on Government funding.
e. 3.4.5.4.5. The cumulative impact of individually immaterial items.
f. 3.4.5.4.6. The cost of administrative processing of the price adjustment modification.
g. 3.4.5.4.7. The CMO Contracts Director or CACO/DACO Group Director shall review
the immateriality determination to ensure the determination is adequately supported and
documented prior to issuing the determination.
✔✔If a contractor fails to submit an accounting change description or a required GDM
or DCI proposal within the time specified by the CFAO, what remedy does the
Government have? - ✔✔The CFAO can estimate the GDM of the affected CAS-covered
contracts and subcontracts with the assistance of the DCAA auditor. The CFAO can
also withhold an amount not to exceed 10 percent of each subsequent payment on the
contractor's CAS-covered contracts up to the estimated GDM until the contractor
, furnishes the required information. The CFAO may also issue a final decision and
unilaterally adjust the contract(s) by the estimated amount of the cost impact.
✔✔A contractor elects to implement a required change to comply with a new or
modified standard prior to the applicability date of the standard. What should the
CFAO/ACO do? - ✔✔a. The CFAO shall administer the change as a unilateral change
b. The contractor shall NOT receive an equitable adjustment that results in increased
costs to the Government prior to the applicability date unless the CFAO determines the
unilateral change is a desirable change. - FAR 30.603-1
✔✔What is a desirable change? What is a unilateral change? - ✔✔a. "Desirable
change" means a unilateral change to a contractor's established or disclosed cost
accounting practices that the CFAO finds is desirable and not detrimental to the
Government and is, therefore, not subject to the no increased cost prohibition provisions
of CAS-covered contracts and subcontracts affected by the change. Some factors
include:
i. The contractor is initiating management actions directly associated with the change
that will result in cost savings for segments with CAS-covered contracts and
subcontracts over a period for which forward pricing rates are developed or 5 years,
whichever is shorter, and the cost savings are reflected in the forward pricing rates; and
ii. Funds are available if the determination would necessitate an upward adjustment of
contract cost or price.
b. "Unilateral change" means a change in cost accounting practice from one compliant
practice to another compliant practice that a contractor with a CAS-covered contract(s)
or subcontract(s) elects to make that has not been deemed a desirable change by the
CFAO and for which the Government will pay no aggregate increased costs.
✔✔How long are CAFU records to be maintained for? - ✔✔A minimum of 6 years and 3
months after payment of the last contract affected by the audit
✔✔What is the difference between "resolving" audit in CAFU and "dispositioning" audit
in CAFU? - ✔✔A reportable audit is considered 'resolved' when the CO has
determined/documented an action plan for addressing the findings in a PNOM or MFR
and has obtained management concurrence. 3.6.1
An audit is considered 'dispositioned' and closed when 1) all settlement actions relative
to the costs questioned or negative findings of an audit report have taken place and are
documented (i.e., COFD, modification, rate agreement), 2) the ACO completes and
obtains management review and concurrence of the PNM, MFR or other document
dispositioning the audit and 3) CAFU generated email is sent to DCAA with copy of
documentation.
✔✔What are the time standards for 'resolving' and 'dispositioning' audits? - ✔✔ACO
shall 'resolve' all audits within 6 months of the audit report issuance date and shall
'disposition' all audits within 12 months of the audit report issuance date. Non-
AND SOLUTIONS GUARANTEE A+
✔✔When is a disclosure statement required? - ✔✔A Disclosure Statement is required
for each business unit selected to receive a CAS-covered contract or subcontract of $50
million or more, or when the company, together with its segments, received net awards
of CAS-covered contracts and subcontracts totaling $50 million or more in its most
recent accounting period.
✔✔What are the 2 types of CAS coverage? - ✔✔a. Full; same applicability as
Disclosure Statement requirements
b. Modified; applies when a company receives a SINGLE CAS covered contract but less
than $50M in total CAS covered contracts.
✔✔What is the difference between Full and Modified CAS coverage? - ✔✔a. Full
coverage requires the contractor to comply with all cost accounting standards in effect
on the date of contract award. This coverage is required if the contractor receives a
single CAS-covered contract award of $50 million or more or receives $50 million or
more in net CAS-covered contract awards in its preceding cost accounting period.
b. Modified coverage only requires the contractor to comply with certain cost accounting
standards such as estimating, accumulating, and reporting costs; allocating costs
incurred for the same purpose; accounting for unallowable costs. Modified coverage
may be applied to a covered contract of less than $50 million awarded to a Business
Unit that received less than $50 million in net CAS-covered contract awards in the
immediately preceding cost accounting period. However, if the business unit receives a
contract for more than $50 million, that contract and all subsequent CAS-covered
contracts must be subject to Full Coverage. Modified coverage also applies to contracts
and subcontractor with foreign governments or their agents. A contract awarded with
modified CAS coverage shall remain subject to such coverage throughout its life
regardless of changes in the business unit's CAS status during subsequent cost
accounting periods.
✔✔What CAS standards must contractors under modified coverage comply with? -
✔✔a. 401 - Consistency in Estimating, Accumulating and Reporting Costs
b. 402 - Consistency in Allocating Costs Incurred for Same Purpose
c. 405 - Accounting for Unallowable Costs
d. 406 - Cost Accounting Period
✔✔The Contractor submitted a description of an accounting change on October 1,
2010. The contractor plans to implement the change on December 1, 2010. The
Contractor did not request the ACO to deem the change a "desirable" change. The ACO
received DCAA's audit on the subject change. In the audit report, DCAA says: Results
of Audit: In our opinion, the subject revision adequately describes the contractor's
revised cost accounting practices. The practices, as described, comply with applicable
Cost Accounting Standards, and FAR Part 31. In our opinion, the cost impact of the
,accounting change is immaterial. What should the ACO do next? - ✔✔a. The contractor
submitted the description of the change 60 days prior to implementation - good
b. This would be classified as a unilateral change
c. Evaluate the description of the change for adequacy and compliance along with any
supporting data asserting cost impact is immaterial
i. If it IS NOT adequate - notify contractor in writing and request revised description
d. If it IS adequate - check if change is CAS-compliant
i. If it IS NOT CAS compliant - Notify contract in writing
e. If the change IS CAS Compliant, check if the cost impact is immaterial.
i. It the change is NOT immaterial -
f. If the ACO agrees with DCAA's audit of the change being immaterial, the ACO makes
a written adequacy and compliance determination that the cost impact of the accounting
practice change is immaterial and the business function is complete.
g. ACO writes a MFR for the supervisor explaining the change is adequate, compliant,
unilateral, and the cost impact is immaterial (All documented in AIT)
✔✔The contractor submitted an accounting change and did not ask the ACO to view as
a desirable change. The ACO received DCAA's audit and said it adequately complies.
What do you do now? - ✔✔a. Adequately complies - The change adequately describes
the contractor's revised accounting practice and the practice complies with applicable
Cost Accounting Standards and FAR Part 31.
b. Did DCAA determine any materiality? If NO, then the ACO requests the contractor to
submit a General Dollar Magnitude (GDM) proposal, unless the ACO determines the
impact to be immaterial.
c. ACO can request contractor to identify all affected CAS-covered contracts and subs.
d. After evaluating GDM, ACO can determine immateriality; negotiate and resolve;
request a revised GDM; or request submittal of a Detailed Cost Impact (DCI) proposal.
✔✔What criteria are used to make a materiality determination? - ✔✔a. 3.4.5.4.1. The
absolute dollar amount involved
b. 3.4.5.4.2. The amount of contract cost compared with the amount under
consideration.
c. 3.4.5.4.3. The relationship between a cost item and a cost objective
d. 3.4.5.4.4. The impact on Government funding.
e. 3.4.5.4.5. The cumulative impact of individually immaterial items.
f. 3.4.5.4.6. The cost of administrative processing of the price adjustment modification.
g. 3.4.5.4.7. The CMO Contracts Director or CACO/DACO Group Director shall review
the immateriality determination to ensure the determination is adequately supported and
documented prior to issuing the determination.
✔✔If a contractor fails to submit an accounting change description or a required GDM
or DCI proposal within the time specified by the CFAO, what remedy does the
Government have? - ✔✔The CFAO can estimate the GDM of the affected CAS-covered
contracts and subcontracts with the assistance of the DCAA auditor. The CFAO can
also withhold an amount not to exceed 10 percent of each subsequent payment on the
contractor's CAS-covered contracts up to the estimated GDM until the contractor
, furnishes the required information. The CFAO may also issue a final decision and
unilaterally adjust the contract(s) by the estimated amount of the cost impact.
✔✔A contractor elects to implement a required change to comply with a new or
modified standard prior to the applicability date of the standard. What should the
CFAO/ACO do? - ✔✔a. The CFAO shall administer the change as a unilateral change
b. The contractor shall NOT receive an equitable adjustment that results in increased
costs to the Government prior to the applicability date unless the CFAO determines the
unilateral change is a desirable change. - FAR 30.603-1
✔✔What is a desirable change? What is a unilateral change? - ✔✔a. "Desirable
change" means a unilateral change to a contractor's established or disclosed cost
accounting practices that the CFAO finds is desirable and not detrimental to the
Government and is, therefore, not subject to the no increased cost prohibition provisions
of CAS-covered contracts and subcontracts affected by the change. Some factors
include:
i. The contractor is initiating management actions directly associated with the change
that will result in cost savings for segments with CAS-covered contracts and
subcontracts over a period for which forward pricing rates are developed or 5 years,
whichever is shorter, and the cost savings are reflected in the forward pricing rates; and
ii. Funds are available if the determination would necessitate an upward adjustment of
contract cost or price.
b. "Unilateral change" means a change in cost accounting practice from one compliant
practice to another compliant practice that a contractor with a CAS-covered contract(s)
or subcontract(s) elects to make that has not been deemed a desirable change by the
CFAO and for which the Government will pay no aggregate increased costs.
✔✔How long are CAFU records to be maintained for? - ✔✔A minimum of 6 years and 3
months after payment of the last contract affected by the audit
✔✔What is the difference between "resolving" audit in CAFU and "dispositioning" audit
in CAFU? - ✔✔A reportable audit is considered 'resolved' when the CO has
determined/documented an action plan for addressing the findings in a PNOM or MFR
and has obtained management concurrence. 3.6.1
An audit is considered 'dispositioned' and closed when 1) all settlement actions relative
to the costs questioned or negative findings of an audit report have taken place and are
documented (i.e., COFD, modification, rate agreement), 2) the ACO completes and
obtains management review and concurrence of the PNM, MFR or other document
dispositioning the audit and 3) CAFU generated email is sent to DCAA with copy of
documentation.
✔✔What are the time standards for 'resolving' and 'dispositioning' audits? - ✔✔ACO
shall 'resolve' all audits within 6 months of the audit report issuance date and shall
'disposition' all audits within 12 months of the audit report issuance date. Non-
