International Trade in Services.pdf - DSpace at Khazar University

Accounting Services 269
The accounting profession is partially protected from offshoring by domestic
regulations on liability insofar as a local accountant is liable for the delivery of certain
services. Nonetheless, many upstream activities can be outsourced, particularly
those that have low local knowledge content and require lower qualifications.
Typically, bookkeeping, account management, billing services, payroll, tax planning
and returns, and the preparation of financial statements are accounting services
that can be outsourced. Outsourcing can be undertaken within a firm (with
locations in different countries) or with a contracted service provider. An
accounting firm can also use resources located outside a client’s country whether
or not the resources are part of a global network. For instance, some accountants
in France have partnerships with Tunisian firms to second them in periods of high
demand. Thus, the client could be a company or another accounting firm. There
are, accordingly, a significant number of possible business models involving outsourcing
and offshoring. Some examples of offshore accounting services are indicated
in table 8.3.
The level of outsourcing opportunities for accounting firms will depend on
international relationships, language ability, and professional expertise, as well as
access to a quality communications infrastructure. Knowledge of international
accounting standards is essential, and most firms engaged in this form of trade will
seek certification through the International Organization for Standardization.
Technologies profoundly affect the accounting business. Good accounting
software increases productivity in accounting firms, while requiring robust information
and communications infrastructure and professional training. Software is
widely used in the industry for accounting transactions and tax preparation. From
a trade standpoint, policy makers can determine if tariffs, inadequate infrastructure,
or limited educational opportunities are inhibiting domestic firms from
deploying technology and competing on a global basis. They can adjust rules and
regulatory oversight to ensure that accounting professionals have access to robust
information technology systems. On the other hand, some accounting firms
engaged in the offshoring business have expressed fears that the diffusion of this
software would suppress the need for many of the outsourced services. Thus, the
prospects for offshoring could be overestimated.
Table 8.3. Examples of Offshored Accounting Services
Commoditized transactions Value added High value added
Invoice processing Auditing Financial planning
Expense processing Financial statements Financial analysis
Accounts receivable Quarterly reports Tax compliance
Source: O’Sullivan (2008).