Offshoring

Offshoring is the process of relocating certain business procedures to another country. It is similar to outsourcing other than the relocation outside the country. Offshoring is increasing in popularity each day. When researching how this has affected the accounting industry, I did not find much information. I believe this is due to the newness of the idea for areas other than information technology. In McKinsey Quarterly I found an article, dated back to 2005, entitled "Ensuring India's Offshoring Future", which mentioned how India's supply of talented workers is growing outside the areas of IT, into research and development, finance, and accounting. This leads me to believe that offshoring is going to be increasingly affecting the accounting industry in the future, but has not done so as of yet.

From the articles I read through, there didn't seem to be any relevant data as to how many companies have tried offshoring their accounting divisions or processes. This leads me to believe that this idea is still being researched in terms of the accounting industry. I personally find it hard to believe that many accounting processes could be successfully and efficiently be completed through the use of offshoring, but there are indications of this being a growing trend. In an article from 2005 in the Journal of Accountancy, various authors report on the use of offshoring for tax purposes. Some companies have found it cost efficient to offshore their tax preparation processes during the busy tax season due to under staffing issues. It is still too early to examine the effects on a large scale, but the article did report that some companies had reported high cost savings due to offshoring tax preparation processes. As I am getting ready to being working full time at a local public accounting firm, the idea of our work being sent offshore is a bit scary, but with the overload of work during tax season this may prove to be a trend that will help lighten the load.