Feb
02
Offshoring has become more prevalent in recent years. Most firms send part of their operations to cheaper places overseas.
But offshoring of audit functions is becoming more popular and, according to this report, a lot of it is aimed to reduce fees that comes from the the increased reporting and compliance requirements mandated by Sarbanes-Oxley. But as the report says, it's fraught with dangers. Sure, clients would welcome a reduction in fees but there would be some serious concerns, particularly in regard to quality control, data protection and confidentiality. For the big firms, it means asking hard questions about which procedures could be sent offshore safely. No easy answers on that one.
A lot of people are concerned about sending jobs overseas in fears of security leaks. As the global economy is shrinking, I see this being less of an issue. Many countries now have regulations to avoid most of the leaks that companies are concerned about. And as far as quality control, companies have been sending support overseas for years. After you make a sale, support is where your customers interact with the company. If you’re okay with what they are doing now, why not allow audits as well?