The Cost Accounting Standards Board

Date of Submission


Document Type


Degree Name

Master of Science in Accounting




Robert McDonald


United States, Cost Accounting Standards Board, Defense contracts--United States--Accounting, Cost accounting--United States--Law and legislation

Call No. at the Univ. of New Haven Library

AS 36 .N29 Acc. 1992 no.10


In August of 1970, Congress passed an amendment to the Defense Procurement Act, Public Law 91-379, which established the Cost Accounting Standards Board (CASB). The law authorized CASB to promulgate standards to be followed by defense contractors who were awarded negotiated defense contracts of $100,000 or more. The purpose of these standards was to achieve uniformity and consistency in cost accounting practices used by contractors in determining the price the government will pay for goods and services. From 1970 to 1980, CASB issued nineteen Cost Accounting Standards (CAS) which remain in force today.

This thesis will study the history and development of CASB as it relates to the defense industry as well as CASB organization, promulgation, and types of contract coverage. It will discuss and analyze the nineteen standards and provide a summary of each standard, the more important provisions, any exceptions, the effective date, and the purpose of the standard. Finally, it will address the following CAS administration requirements: the disclosure statement which requires defense contractors to provide in writing detailed descriptions of their accounting practices; noncompliance issues which are determined by the Defense Contract Audit Agency (DCAA) during the audit process; and lastly, the cost impact proposal which must be prepared by the contractor for either changes made to the cost accounting system or noncompliance.

This thesis will provide insight, understanding, and practical application of the Cost Accounting Standards as they relate to contracting with the Federal Government in a defense environment.