International Finance And Accounting Outsourcing Risk Identification, Evaluation And Suggestion

Finance and accounting outsourcing (FAO), as a newly developedoutsourcing model in recent years, has become more and more popular to themanagement levels and CFOs. With the development of FAO, the economicresults, social benefits and development prospects it brings out are also widelyrecognized. Not only medium and small-sized enterprises interested inoutsourcing their non-core process to service providers, large scale industries alsoprefer to outsource the whole accounting process to qualified and experiencedservice providers. Many group companies or international conglomerates start tore-organize the finance departments, separating the foundation accounting processand have it outsourced to focus on the development of core competitiveness.Today, the scope of FAO service has already be international. In order tomaximally save the cost and make sure the effective financial work, multinationalcompanies prefer to set share service center or work with the service providers inthe area having lower labor cost. In this way, they can not only enjoy the greatservice, but also reduce their cost. However, companies will face more risksduring the transnational FAO activity which caused by the changing and variety ofinternational environment.Starting from the FAO theory, Risk Management theory and RickIdentification Process, the author plan to establish an International FinanceAccounting Outsourcing Risk Evaluation System with the help of professionalopinions from experts involved in FAO projects，creatively involving theinternational FAO risks, figuring the weight of each risk, and rate them accordingto the risk level of each branch in Asia-Pacific region base on the sample of the amultinational manufacture company’s outsourcing experience. In addition,suggestions and advices to risks from each level have also been given base on theresults with the help of International Finance Accounting Outsourcing RiskEvaluation System and Risk Management theory.The innovational part of the paper is analyzing and summarizing the risks from international outsourcing with multinational manufacture company as theobject of research; Establishing and evaluating International Finance AccountingOutsourcing Risk Evaluation System by using Analytic Hierarchy Process andFuzzy Comprehensive Evaluation Method to identify the weight of the risks ineach level; calculating and rating the each branches’ risk level.