Failing with Flying Colors: The Saga That Led to a Disclaimer of Opinion on the Department of Defense’s First Full-Scope Audit

Abstract

ABSTRACT Using primary sources composed of U.S. federal legislation and federal agency audit reports, this paper documents and analyzes events in the nearly two-and-a-half-century-long process leading up to the disclaimer of opinion on the first full-scope audit of the Department of Defense (DOD) consolidated financial statements in 2018. It also applies theoretical lenses from political science, namely governmentality and public accountability, to characterize the development of these events and their ultimate aftermath, including results of subsequent DOD audits up to the most recently completed one (FY 2023). Thus, the paper extends into the present century the historiography of accounting and auditing over military endeavors in the U.S., which stretches back to the period just before the American Civil War, and analyzes its accounting and societal significance, thereby responding to a lacuna in the literature identified in earlier research and contributing to the discussion on accountability and good government.