Finance and Accounting Activities Offshore and Its Impact on Accounting - DOC

Added on - 06 Jun 2020

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Why finance and accountingactivities offshore overseasand how does this impact onaccounting
Table of ContentsIntroduction......................................................................................................................................1Statement of problem.......................................................................................................................1Aims and Objectives........................................................................................................................2Aims.......................................................................................................................................2Objectives:..............................................................................................................................2Questions:...............................................................................................................................2A Brief Methodology.......................................................................................................................4Justification and potential output of research project......................................................................5Data analysis...........................................................................................................................5Conceptual framework...................................................................................................................13Project budget and schedule...........................................................................................................14REFERENCES..............................................................................................................................16APPENDIX....................................................................................................................................18
IntroductionThe Sydney Morning Herald paper (Stewart, 2009) found that many accountants inAustralia offshore a large proportion of operations of their company to Asian countries such asIndia and the Philippines, as their labour costs are a lot lower than the local ones. Offshoring alsosaves employerssuperannuation, annual leave, maternity leave and workers compensation. Theoffshoring of finance and accounting enhances human resourcefunctionsand is continuouslyrising around the world (Schniederjans, 2015).According to the Australian Sydney Morning Herald Australian, the largest Australiantelecommunication company, Telstra could move up to the 1000 jobs overseas to the Philippinesand India as of 2014 (Ramil and Smith, 2014). Mohapatra (2015) notes that intelecommunication industries and other business firms offshoring means to get their work doneby organizations that are not connected with the main company. With the help of Finance andaccounting offshoring telecommunication companies accomplish their work right on time andare able to maintaining a low budget and error. Oshri (2015) describes that it is the easiest wayto understand a project. The work can be done with the help of specialist firms. Offshoringfinance and accounting provides huge benefits to the organization and it also gets requiredquality of work and a financial report from those offshoring firms (Owens, 2014).Aims and objectives as well as a brief methodology for the research of offshoring infinance and accounting in telecommunication areas have been provided. The purpose of thisresearch is to investigate the phenomenon in Telstra Corporation Limited.Statement of problemIn this report all the aspects in respect of offshoring will be considered. All the Australiancompanies are providing there work to other countries and by that various affects are made onthem . The accounting is affected by this so it is needed that study shall be carried out by whichit will be identified that whether it is good or bad for any organisation. The overall impact of itwill be seen on labour cost, quality of activities and also in knowledge and skills of accountingprofessionals. The problem in this is to choose the best person who will be able to perform thetask with full potential and in best manner. Also decision is affected by the price which they arecharging for getting the work completed. The another issue in this is to identify whether the otherperson will be able to complete the work in appropriate time or not. So all of these are some of1
the issues which are to be dealt by in proper manner to make the process a success and achieveall objectives of business.Aims and ObjectivesAimsThe aims of this research are to identify the reason why in the last debate manytelecommunication companies like Telstra Corporation Limited are offshoring finance andaccounting services and using back office jobs and the benefits of such business strategy. It wasalso be identified that how these activities will be affecting the accounting of any organisation.Objectives:To establish the fact that Telstra Corporation Limited offshore overseas the activitieswhich are related to finance and accounting;To study the need for offshoring finance and accounting for a telecommunicationcompany;To investigate the benefits of offshoring finance and accounting in thetelecommunications industry, andTo understand the trends of companies that offshore business in the global market andthen drawing the conclusions from it in this respect.Questions:1.First will be to know why is the offshoring process adopted by the organisations in resectof financial and accounting activities?2.Why are these services increasing in the whole economy?3.What will be the impact of these activities on accounting profession. Will it be affected infavourable or adverse manner?4.How can it be considered by the company to achieve maximum advantages?The Literature ReviewItwill analyse the reason why offshoring finance and accounting is increasing in thetelecommunication industries and present facts that help to understand the pros and cons relatedto this sector. Secondary data will be comprise various internet sources, journals, books, GoogleScholar and other third party sources that provide relevant information on the subject.2
According toBlaskovich and Mintchik (2011)the offshoring activities are beingadopted on large scale by Australian accounting companies and there are various reasons due towhich it is undertaken by them and is increasing. The main factor is cost which will attract all asit leads to saving of cost. By the use of this the cost of overheads is reduced and also benefits arereceived. Then next comes the technology which means that as advanced technology will beused by others so this will lead to increase in productivity and processes will be improved. Bythe help of them electronic system will be used for payments and receipts. This will make thework easier and so it is used by more and more people. Also the quality of services is improvedas activities will be performed by skilled persons so they will be using all the best techniques andthis way risk will be reduced. All the operations will be tracked and then measures will be takento improve the efficiency. The another factor is that by using then trained staff will be availablewhich otherwise would not have been possible if all the work has been performed in house. Theproblems of labour shortage will be dealt in appropriate manner by help of outsourcing. So dueto all these reasons it is adopted by companies and is also improving.As per the views ofBrandau and Hoffjan (2010)there are many advantages anddisadvantages which are associated with the use of offshoring and they needs to be analysed asthen only proper decisions can be made by all which will be in overall interest of business andeconomy as whole. The main pros of this service is that less number of employees will berequired to be hired as work will be performed by others and the need to make payment will nothave to be faced and this will decrease the amount of expenditures to be made. All the work willbe managed by firms and it will be delivered to clients on timely basis so this will help indeveloping good image (Shared Services & Outsourcing, 2017). Quality will also be maintainedas skilled professionals are hired by those firms and they are known to work with full efficiency.In this all aspects such as bookkeeping, payroll, taxation will be considered and as time is savedso it can be used to carry out some other functions which will yield additional earnings tobusiness.In addition to them there are some cons also which are related to this service and itincludes that confidentiality will be lost as all information will be provided to outside parties sodecision in relation to it shall be taken after considering all the aspects. It shall be identified thatthe firm with whom dealings are made should be capable to satisfy customers. There are chancesthat some services are not provided or given in addition and this will lead to unnecessary costs.3
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