Risk and Control in Accounting Outsourcing

Others
Poster Penyelidikan -
PM Dr. Aini Aman, PM Dr. Noradiva Hamzah, PM Dr. Ruhanita Maelah, Dr. Rozita Amiruddin, Dr. Sofiah Md. Auzair (2010) Risk and Control in Accounting Outsourcing


Abstract: Accounting outsourcing refers to process of transferring part of accounting functions to a third party provider or its fully owned subsidiary in order to cut cost, gain access to scarce skills or obtain competitiveness. The global market for outsourcing of finance and accounting is growing rapidly, while Malaysia has been continuously ranked as the world’s third most attractive outsourcing location since 2007. Despite these, little is known about the accounting outsourcing activities, risks and control. This study points to the risks issues in accounting outsourcing of client and vendor engaging in accounting outsourcing work. Findings show that firms are facing different types of relational and performance risks inherent in the accounting outsourcing task and vendors are relying on formal control mainly contract and Service Level Agreements (SLAs) in managing those risks.