Study On Risks Of Accounting Firms To Undertake Financial Outsourcing Business

With the economy development, accounting firms are facing with the fierce marketcompetitions and continue to expand their business market. The business structure ofaccounting firms has also changed from audit service dominate the business to share betweenaudit and financial outsourcing business. However, during the development of outsourcingbusiness huge risks also exist. The risk management of undertaking financial outsourcing haslong been a big trouble to accounting firms. There are only a few current studies onaccounting firms undertaking financial outsourcing business and the researches lacksystematic exposition. The risk identification factors of accounting firms undertakingfinancial outsourcing business are not comprehensive; risk evaluation of accounting firmsundertaking financial outsourcing business lacks quantitative analysis, risk control measuresof accounting firm to undertake financial outsourcing business lacks pertinence. Therefore,study on risks of accounting firms undertaking financial outsourcing business is critical andcan be an important guiding significance for accounting firms practice work.This paper firstly introduces the overall basic theory: accounting firm undertaking thefinancial outsourcing business mainly involves financial outsourcing theory, principal-agenttheory, and asymmetric information theory and risk management theory. Theory of financialoutsourcing and risk management are then introduced in detail to pave the way for thesubsequent wording. Secondly, the paper introduces the financial outsourcing businessprocesses; dividing undertake of financial outsourcing business is divided into signing stage,implementation stage and the completion stage. Risk factors of accounting firm to undertakefinancial outsourcing business are identified in stages and risk factors are elaborated in details.Thirdly, the risk of accounting firms undertaking financial outsourcing business are assessedwith projection pursuit method, risk assessment model of accounting firm is built to undertakethe financial outsourcing business; examples are then given to elaborate and to analyze risksof accounting firms to undertake financial outsourcing business deeply. The last part of thepaper proposes risk control measures of accounting firms undertaking financial outsourcingbusiness. Different measures are carried out according to the different risk factors in signingstage, implementation stage and the completion stages. Then with overall view, the paper makes recommendations for accounting firms to improve their ability of undertaking financialoutsourcing business.