Managing Relational Risks in Accounting Outsourcing: Experiences of Small Firm

Aini Aman and Engku Zaidah Engku Abdul Rahman (2011) Managing Relational Risks in Accounting Outsourcing: Experiences of Small Firm, World Applied Sciences Journal 15 (1): 56-62, 2011, ISSN 1818-4952

Abstract: This paper aims to explore the relational risks in client-vendor accounting outsourcing relationship of small firms and the innovating strategies in managing the relational risks. This study used interpretive case study approach with in-depth interviews, document reviews and observations in order to understand the relational risks and strategies in managing the risks. Findings show the importance of understanding client’s ability and capability at the early stage of relationship. Vendor’s perceptions could contribute to relational risks. Innovating strategies in managing risks are ad-hoc and would be relied on the type of relational risks aroused. Innovating strategies in managing relational risks especially in small outsourcing firms could contribute to further understanding in developing long-term relationship with vendor/clients and could enhance profit performance of the firms and accounting outsourcing industry.

Key words:Relational risk management,  Accounting outsourcing, Small firm, Management strategy, Innovation