Finance & Accounting Outsourcing   Term Paper ID:42418 Click to get this paper

Essay Subject: na... More...

10 Pages / 2250 Words 11 sources, 12 Citations, MLA Format $40.00 Return to List of Papers

Paper Introduction: finance and accounting outsourcing Introduction Outsourcing in accounting and finance refers to the contracting ofindependent entities to perform accounting and transactional activitiesthat otherwise would be performed by in-house staff Outsourced activitiesand functions within the realm of accounting and finance can run the gamutfrom relatively unsophisticated operations to highly complex processes Michael There are benefits that are associated with theoutsourcing of finance and accounting activities not the least of whichare lower costs There also are risks involved however as the ultimateaccountability and the Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. This dictum does notmean, however, that the outsourced contracting entity is not subject toaccountability and responsibility. This title of the Act of 2 2also requires that the chief executive officer (CEO) and the chieffinancial officer (CFO) of a public company must separately issuestatements to accompany the audit report. International Finance, 9(3), 381-392.Michael, A. The issues are directly relevant to public companies thatcontract out these functions. for providing to alaw enforcement officer any truthful information relating to the commissionor possible commission of any Federal offense, shall be fined ... This title of the Act also requires publiccompanies to establish audit committees to which external auditors mustreport. Ineach case, however, the standards reflect the underlying principles thatare applied in (a) the maintenance of financial records and in (b) thepreparation of financial statements of performance and position. While both risks and rewards are associated with finance andaccounting outsourcing, one should bear in mind that the underlying conceptis not novel. Could better accounting have prevented the current liquidity crisis? Business Ethics Quarterly, 14(3), 377-398.Duganier, B. Journal of Financial Service Professionals, 62(1), 6-8. The highly publicized collapse of the Enron Corporation,together with the complicity of and the facilitating role of the accountingfirm Arthur Andersen and the manipulative and unethical behaviors of thetop management officers of Enron shocked a public that had already beenexposed to the earlier WorldCom scandal (Boyd, 2 4). 1 7-2 4, 116 Stat. GAAP, in contrast to IFRS, are country-specific. Second, the outsourcedcontracting entity is answerable to the legal and professional bodies thatgovern their operations (Seelig & Freeman, 2 8). Journal of Accounting, Auditing & Finance, 23(1), 141-171.Pounder, B. Global companies wanting to dobusiness in the larger economies or the have their equity shares traded inthose economies most frequently must provide financial data that areconsistent with the national accounting standards of the economy where theywant to do business. The IAS is the principal organization that is responsible forinternational accounting standards. Bank Accounting & Finance, 18(4), 39-42.Ford, C. New governance, compliance, and principles- based securities regulation. Ethical guidance and constraint under the Sarbanes-Oxley Act of 2 2. Theglobalization of business activity has generated an increasing need forstandardization among countries with respect to accounting practices andstandards. Reg AB: Lessons learned and insights from year one. Strategic Finance, 88(7), 41-45.Sarbanes-Oxley Act of 2 2, Pub. American Business Law Journal, 45(1), 1- 6 .Heffes, E. Title V of the Act addresses the relationships betweenpublic companies and securities analysts. (2 4, July). This crisis contains elements of (a)facilitating fraud, (b) an absence in many instances of adherence toaccepted accounting principles, and (c) complicity in ignoring risk infavor of unrealistic valuations of these instruments. The provisions include a requirement to disclose all off-balancesheet transactions. (2 8, April). The stated objective of the Act is, "to protect investors byimproving the accuracy and reliability of corporate disclosures madepursuant to the securities laws" (Sarbanes-Oxley Act of 2 2, Preamble). The issues also are directly relevant to theoutsourcing contractor entities. (2 8, Winter). The Sarbanes-OxleyAct of 2 2 was intended to correct the regulatory deficiencies thatallowed such problems to develop (Orin, 2 8). How globalization is affecting U.S. The Act further stipulates minimum assurances that the reports ofexternal auditors must contain. First, the outsourced contracting entityis answerable to the client organization. A compelling issue confronting the financial and accounting communityglobally is the harmonization of international accounting standards. N. The new global regulatory agenda in financial services: A framework for the twenty-first century. (2 8, June/July). At a more specific level, the meaning ofthe term corporate governance tends to vary among economies because ofdifferent legal requirements that regulate the actions of partiesassociated with corporations, as well as variations in what is perceived tobe acceptable business practices across economies. Frequently also, such companies must preparereconciliations to do business in several major economies (Ford, 2 8). (2 8, Spring). IFRS andGAAP are most important in relation to the use by external parties offinancial information about a company. Outsourced activitiesand functions within the realm of accounting and finance can run the gamutfrom relatively unsophisticated operations to highly complex processes(Michael, 2 8). Title III of the Sarbanes-Oxley Act of 2 2 requires that members ofthe audit committee of a public company (a) be company directors and (b)not be operating officers of the company. (2 7, January). IFRS, GAAP, Governance, and Sarbanes-Oxley This section of this paper explores and examines issues that arerelevant to the contracting out (or outsourcing) of finance and accountingfunctions and transactions by global public companies. 745.Seelig, M., & Freeman, R. (2 6, Winter). When the public company also contracts with the independent auditor toprepare income tax returns however, this action is not a legal requirement.The company could prepare its own tax return. There are benefits that are associated with theoutsourcing of finance and accounting activities, not the least of whichare lower costs. Thus, contractors cannotcollude with client organizations and hopes to escape punishment. Title II of the Act of2 2 is intended to remove the inherent conflict of interest that occurswhen an auditing offers client companies non-auditing services and auditingservices simultaneously. The Act requiredmajor changes in the regulation of financial practice and corporategovernance. The second perspective is that of theoutsourced contracting entity.IFRS and GAAP The IFRS structure is a component of the International AccountingStandards (IAS) regime. The structural origins of conflicts of interest in the accounting profession. These needs are particularly relevant where operating facilitiesare established by public companies in countries other than their homecountry (McCreevy, 2 6).Governance Issues and the Sarbanes-Oxley Act of 2 2 The term corporate governance refers to the relationships andresponsibilities among the various stakeholders of a corporation withrespect to operating the company. ReferencesBoyd, C. The Sarbanes-Oxley Act of 2 2 was signed into law on July 3 , 2 2. If a public companyissues a supplemental statement re-stating the financial performance or thefinancial position of a public company, Title III of the Act requires thatboth the CEO and the CFO of the company to return to the company allbonuses, other incentive-based compensation, equity-based compensation, andany profits derived from the sale of company securities. The provisions of this Act also apply toforeign companies that operate in the United States, as well as to foreigncompanies whose public shares are traded in the United States. Top financial reporting and audit concerns for preparers at private and public companies. L. accountants. The corporate scandals that were revealed in the early-years of the21st century provided the strongest motivations for passage of Sarbanes-Oxley Act of 2 2. In the United States, corporate governance today largely is governedby the Sarbanes-Oxley Act of 2 2. (2 8, January). Differences in the GAAP applied in different economies createpotentially serious threats to companies that operate globally. finance and accounting outsourcing Introduction Outsourcing in accounting and finance refers to the contracting ofindependent entities to perform accounting and transactional activitiesthat otherwise would be performed by in-house staff. As indicated in the precedingdiscussion, however, the independent auditor is responsible to theregulatory and professional organizations that govern its operations. National accounting standardsdeveloped in major economies such as the United States, Japan, and themajor economies in Western Europe tend to be more influential thanaccounting standards developed elsewhere. The Act is a comprehensive law that is structured into 11 titles.Title I of the Sarbanes-Oxley Act of 2 2 requires a second-partner reviewwithin an auditing firm of client company audits. Outsourcing the finance function. M. These statements must makepersonal assurances that the financial report fairly represents theoperations and the financial position of the company. These issues arediscussed from two perspectives. Financial Management, 32-34.Orin, R. Such standards likely will include the following: > International Financial Reporting Standards (IFRS), as these standards apply in various countries > Generally Accepted Accounting Procedures (GAAP) that may be specific to various countries > Other public company laws and regulations, such as the Sarbanes- Oxley Act of 2 2 in the United States Accountability and Responsibility As noted above, the ultimate accountability and the responsibility forthe quality, legality, and ethical character of the output remains with thecompany, not with the outsourced contracting entity. orimprisoned not more than 1 years, or both" (Section 11 7). Title IV of the Act strengthens the disclosure requirements for publiccompanies. It is through the IAS that proponentsof the international acceptance of the body of IAS pursue theimplementation of these standards globally (Pounder, 2 7). These standardsfrequently vary from one another in key aspects to an extent that makes thedirect comparison of financial reports prepared under different accountingstandards a risky activity in and of itself. (2 5, June/July). J. When a public company engages an independent auditor toprepare a set of certified financial reports, the company is adhering tolaw. There also are risks involved; however, as the ultimateaccountability and the responsibility for the quality, legality, andethical character of the output remains with the company, not with theoutsourced contracting entity (Duganier, 2 5). Thus, thehigher level of commonality of GAAP and general financial reportingpractices the lower the accounting-related risk to global companies andinvestors. Summary This paper explored issues related to finance and accountingoutsourcing. The intent of this Title is tocollusive behavior between public companies and securities analysts toprovide greater protection to investors and lenders. When a company files anincome tax return prepared by an independent auditor, however, the ultimateresponsibility for its accuracy, truthfulness, and completeness resets withthe company, not the independent auditor. Bank Accounting & Finance, 21(4), 33-38.Wagoner, J. Finance and accounting outsourcing can improve control. (2 8, June). GAAP and other national accounting standards are developed by nationalbodies in a large number of countries around the world. Title XI of theSarbanes-Oxley Act of 2 2 states that it is, "a crime for any person tocorruptly alter, destroy, mutilate, or conceal any document with the intentto impair the object's integrity or availability for use in an officialproceeding or to otherwise obstruct, influence or impede any officialproceeding is liable for up to 2 years in prison and a fine" (Section11 2). The importance to external partiesstems from the level of assurance of trustworthiness to such users offinancial information that is conveyed by certifications that financialstatements of financial performance and position (McCreevy, 2 6). The Act states further, "Whoever knowingly, with the intent toretaliate, takes any action harmful to any person ... Relevance to Global Companies With respect to the quality, legality, and ethical character offinancial and accounting records, reports, transactions, and other outputs,the situation becomes even more complicated for globally operatingcompanies. Such companies must assure that the operations, records, datasecurity, reports, and all other aspects of the financial and accountingfunctions conform to the standards that are applicable in (a) the homecountry of the company and (b) the host countries within which the companyoperates (Heffes, 2 8). Most frequently,corporate governance refers to the rights, obligations, and relationshipsthat exist among the management, the board of directors, and capitalsuppliers of a public company. Financial Executive, 24(5), 14-16.McCreevy, C. The financial system in the United States in 2 8, however, is undersevere strain because of the failure of mortgage-backed security derivativefinancial instruments - the so-called sub-prime mortgage crisis, thataffect public financial institutions that are subject to the provisions ofthe Sarbanes-Oxley Act of 2 2. No. The first perspective is that of themanagement of global companies that outsource finance and accountingfunctions and transactions. L. As a consequence,severe economic losses have been and are continuing to be suffered by manyof the largest public companies in the financial services sector, investorsin those companies, and the general economy that spreads the adverseeffects to every company and every citizen (Wagoner, 2 8). If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

Many of our Papers can be Downloaded From This Site!

PLEASE READ THIS, IT IS IMPORTANT!

Office hours are Monday through Friday, from 9 am to 5 pm (PST). You may place orders for custom research over the phone during office hours. E-mail requests can be made to our graduate and undergraduate department any time, and will be reviewed during office hours. You may also contact customer service any time through e-mail, and we will review your message during business hours. A great many papers can be downloaded right from this site, but not all of them. If you would like to know if a particular paper is downloadable, just look in the description for: "Available for Internet Download: Y" or "Available for Internet Download: N" If you wish to purchase a paper which is NOT available for immediate download, you will need to make other shipping arrangements. Also, please be aware that these orders are processed Monday through Friday from 9 am to 5 pm (PST). If you place your order after 4:45pm on Friday, it will not be processed until the following Monday morning. We charge $8 per page for all of our pre-written reports, plus shipping (and tax for California residents). However, the highest cost of any ONE report is $136, or 17 pages. Please, take a moment. Make sure you have chosen the report you want or need BEFORE you complete your order. If you are not sure, allow us to help you. We do not offer refunds or exchanges, so it is important for you to let us answer your questions during office hours. Reports which are e-mailed or downloaded are in Microsoft Word format. We are making more reports available for e-mail delivery faster than we can update our listings. Please call to check on the status of particular reports. There are many other shipping options which are listed on the Checkout page.