Development of the internal control system in finance and accounting outsourcing

• Published in: Vestnik Permskogo universiteta. Ėkonomika Vol. 1; no. 28; pp. 175 - 184
• Main Authors: Alina Vitalievna Posokhina, Ksenia Vladimirovna Nikiforova
• Format: Journal Article
• Language: Russian
• Published: Perm State University 01-03-2016
• ISSN: 1994-9960

Popularity of outsourcing among Russian enterprises can be explained by several reasons. Firstly, the process is fairly well-developed in Western companies. Secondly, many domestic firms pay attention to increasing efficiency of their activities, improving quality and cost optimization. Transition of modern Russian companies to outsourcing is determined by the opportunity to develop business concentrating maximum efforts on the core activities, which is especially important in the context of increased competition and market instability. Outsourcing may be represented by different classifications. This article discusses finance and accounting outsourcing. Widespread use of this type of outsourcing is associated with a number of advantages which it provides business with. However, there are certain risks, as well as a time lag between receiving the service and evaluation of its quality. Having analyzed the problems arising while evaluating whether it is reasonable to use and develop outsourcing, as well as advantages and risks of outsourcing, the authors came to the conclusion that one of the risks – namely, the risk of losing control by the customer – is understudied in Russia. The procedure of analyzing the risk of losing control on the part of the customer must be designed and adjusted for accounting both company’s “own” facts of economic life and operations provided within the process of outsourcing. The latter should take into account the internal control system of the customer. We believe that the internal control system of an outsourcing company should be complex. It should combine the internal control system required by the legislation on accounting and the internal control system of the auditing type. The article presents a variant of such a combined control system. On the basis of the author's proposals, exploratory analysis of the internal control system at one of Perm outsourcing companies was conducted. It is concluded that the internal control system of Russian outsourcing companies is only being set. We believe that the proposed variant of the combined internal control system will help to develop finance and accounting outsourcing, create and improve the internal control system, reduce the risk of losing control by the customer, and give auditors understanding of the level of internal control in service organizations.