Research Report: Offshore Outsourcing's Impact on Accounting Firms

This report provides a comprehensive analysis of offshore outsourcing in the accounting industry, examining its increasing prevalence and strategic implications. The report delves into the background of offshore outsourcing, highlighting the cost-effectiveness of outsourcing accounting and bookkeeping services to low-labor-cost countries like India, driven by technological advancements. It formulates research questions focusing on the significance of outsourcing for accounting firms, its benefits for companies, and the advantages of low labor costs. The literature review explores the benefits of offshoring, such as reduced costs, enhanced compliance, and access to new technologies, while also acknowledging the associated risks, including data protection and quality control. The report emphasizes the importance of trust, customer relationship management, and the use of technology. Data collection methods involve online resources and research questions. The report concludes that offshore outsourcing is a booming trend, enabling firms to enhance profitability and manage tasks effectively.

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Table of Contents
Chapter 1 - Introduction.............................................................................................................2
Chapter 2 - Background and Statement of Problem...................................................................2
Chapter 3 - Research Question...................................................................................................3
Chapter 4 – Literature Review...................................................................................................3
Chapter 5 - Data Collection method and Instruments................................................................6
References..................................................................................................................................7

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Chapter 1 - Introduction
The aim of the assignment actually deals with the research study on the topic which is
offshore outsourcing of the accounting industry. Some of the significant parameters while
conducting the research work is considered in this case which is that the accounting industry
is outsourced to some of the accounting firms where further the firms are outsourcing to the
low labor cost countries. The benefits of the companies for opting the outsourcing of the
accounting industry are also considered in that case along with the risk and future
implications on the business of the company. Another significant factor which is highlighted
in this case is that benefits of the low labour costing countries. This is quite an interesting
topic which is booming in the recent years.
Chapter 2 - Background and Statement of Problem
The chosen topic for this assignment is all about the global outsourcing of the
accounting and the bookkeepers in the industry. There are actually certain benefits regarding
the outsourcing the accounting and bookkeeping industry. Most of the counting and the
bookkeeping works are actually outsourced in the recent years where most of the potential
firm in the industry finds it more cost effective. Most of the financial and accounting services
of the industry are actually outsourced to the other countries and the reason behind it is more
effective work can be obtained at a very low cost. The offshore outsourcing of the financial
and accounting services is increasingly becoming effective due to the fact that the
development in the technological aspects of the company (Schaltegger and Burritt 2017).
The problem statement is regarding the effectiveness of the strategy which is used by
the potential firms in the industry based on strategy utilized in the industry as the technology
in the recent years is enhancing in a rapid manner. The accounting activity which is actually
outsourced by the firm are the cash management, purchase payments which includes the bank
reconciliation and other expenses. The preparation of the financial reports of the company is

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considered as the significant activity of the business. The preparation and forecasting of the
budget, cash management along with the risk management are some of the important
accounting activities which are actually offshored in the other country.
Chapter 3 - Research Question
The typical research question, which have been formulated bellow which are as
follows:
1. What is the significance of the accounting firm when the firm is outsourcing work to
some of the low labour cost countries?
2. What are the benefits of the companies opting to outsource in the accounting
industry?
3. What are the benefits of the low labour costing from the countries?
4. Why is it considered as the blooming topic in the recent years of the success regarding
the offshore accounting?
Chapter 4 – Literature Review
The suitable example of low cost labour for the purpose of the offshore accounting of
the firm is in India. The labour which is available in India is actually cheap and it also
becomes actually cost effective for the company avail the labour from India. There are
actually a lot of accounting firms in India where the outsourcing of the accounting and
bookkeeping activities takes place (Myers 2019). The offshore tasks actually comes from the
other parts of the country to India where most of the companies in that case are benefitted out
of it. Most of the Indian accounting firms are benefitted out such offshoring system due to
that reason that there are ample availability of labours in India where most of the educated

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people are actually unemployed. This further help India to enhance the overall employment
opportunities along with improving the financial performance of the company.
There are actually certain benefits of offshoring the accounting and the bookkeeping
services which are the sharing the burden of risk, reduced errors, enhancing the compliance
of the industry, lower cost of working on the recent technologies, end to end control along
with transparency and further introducing the new services to the clients (Kaplan and
Atkinson 2015). This are mainly the basic benefits of the offshoring process where most of
the business actually concentrates on effectively utilizing this benefits (Kotler et al. 2018).
The burden of risk is actually distributed among the potential employees in the
business associated with the offshoring activities of the firm. As most of the experts in the
domain are associated with the activity related to the bookkeeping and accounting which
further makes them aware about the potential threats which are associated and the process to
rectify it instantly. Due to the significant advancements of the technology there actually exist
the full control over the system along with the transparency in the process of the firm.
There are also certain risk which are actually associated with the offshoring of the
accounting and the financial aspects of the company’s business (Ansoff 2018). There are risk
regarding the protection of data in the system of the company along with the increased cost of
control. The risk is also associated with maintaining the quality or rather the implementation
of the appropriate accounting standard associated with the business. It is important to
maintain the quality standards and further the issues which are the mistakes made by the
company.
In case of outsourcing, it is significant for the business to meet the standards based
on the efforts provided by the employees at a minimal cost bear by the company in order to
keep the customers of the business satisfied and happy (Hambrick 2015). In such a situation it

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is equivalently important for the company to mitigate the risk in order to enhance the future
performance of the business. In this case it is important to enhance the trust among the
potential employees in the business at the time of outsourcing the activities of the
bookkeeping and the accounting aspects of the firm. In order to build the relationship with the
clients it is further important for the business to enhance the customer relationship
management process of the company. It is needed to provide the constant support to the
clients in order to keep them happy regarding the business prospects of the company (Otley
2016).
There are benefit of the low labour costing countries and the reason behind that is
effective services can be ensured at a lower cost of India comparable to that of the work done
by the employees within the country. This further means that there are actually certain
benefits in offshoring the activities along with the task of one country to the other. Suppose in
recent years most of the task are offshored from USA to India as most of the accounting task
of the US firms are management by the accounting firms which are located in India due to the
cheap availability of labours which are quite effective in nature. As per the reports it is found
that the performance put by the employees of the company are actually really effective which
is quite an advantage for the firms located in USA and is the main reason behind such
outsourcing of firms (Fleming and Koppelman 2016).
The labour are cost effective due to the reason that the aspirants of India are actually
highly qualified and quite effective to handle the tasks which are associated with the business
of the company (Holling 2017). The other benefit is actually related to the usage of
technology along with the significant effort which is provided by the company also plays
significant role in the business. The offshoring of the tasks which are related to the business
of the company are further taken into considering by effectively utilizing the potential labours
which are associated from the country of India.

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Based on the critical analysis of the research work it can be said that it is quite a
blooming topic where in recent years due to the significant advancements in technology, most
of the big firms are applying the concepts of outsourcing their work to the other countries
(Kerzner 2017). The outsourcing of the activities related to the accounting and bookkeeping
actually helps the firms to enhance the profitability and further to manage the flow of task in
the business.
The main benefit actually goes to the company which is actually outsourcing the
activities of the business to the other countries. The actually benefits goes to the company
which is outsourcing the accounting related activities of the firm. The company actually
concentrates on bringing the transparency in the business along with maintaining the end to
end control in the internal activities of the business.
Chapter 5 - Data Collection method and Instruments
The information or rather the data are collected from the main resources which are the
online websites, updated news in that case. The resources are collected from the external
factors which are available in the internet. The instruments which are actually utilized in that
case are the research question which are related to the basic facts associated with the
company. The limitation in the data collection which is collected based on the secondary data
which may not be accurate and based on ceratin assumption of the current stats and figures.

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
Fleming, Q.W. and Koppelman, J.M., 2016, December. Earned value project management.
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Hambrick, D.C., 2015. Top management teams. Wiley Encyclopedia of Management, pp.1-2.
Holling, C.S., 2017. Adaptive environmental assessment and management.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Kerzner, H., 2017. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Kotler, P., Keller, K.L., Ang, S.H., Tan, C.T. and Leong, S.M., 2018. Marketing
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approach. John Wiley & Sons.
Myers, M.D., 2019. Qualitative research in business and management. Sage Publications
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Otley, D., 2016. The contingency theory of management accounting and control: 1980–2014.
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Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
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