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Topics: Audit, audit support, audit support services, Outsourcing

Advantages and Disadvantages of Outsourced Audit Support Services

5 MIN READ | Posted on August 04, 2022
Written By Divya Ramaswamy

Advantages & Disadvantages of Audit Support Services

Accounting firm owners often mull over the idea of outsourcing one or more of their accounting tasks, especially audits. From cost savings and efficiency gains to a more significant competitive advantage, the benefits of outsourced audit support services are aplenty. But before you move forward, learning the advantages and disadvantages of outsourced audit support services is imperative.

The main benefit of annual audits is that they help organizations comply with statutory audit requirements. Auditing reviews a company’s internal control and accounting information processes. They often develop operational or compliance audit strategies apart from financial audits. Organizations turn to account firms to conduct external audits. Recent reports suggest that audit is one of the top services undertaken by accounting firms. But what happens when CPA firms lack the bandwidth or do not have audit services in their repertoire? That’s when outsourced audit support services come to the rescue. Outsourcing audit allows accounting firms to free up critical time to focus on strategic planning, increase capacity, as well as expand their service portfolio.

Let’s Look At The Pros And Cons Of Outsourcing your accounting firm’s Audit Services.

ADVANTAGES OF AUDIT SUPPORT SERVICES

ACCESS TO A LARGER EXPERT TALENT POOL WITH EXTENSIVE EXPERIENCE

Unlike hiring an in-house team of accounting professionals, you will get access to a larger talent pool when you choose to outsource. There is no need to compromise as you get access to talents from other parts of the world. Partnering with an outsourcing provider specializing in audit services can help you achieve more productivity, efficiency, and great quality. You will access highly qualified auditors who are trained, experienced, and experts in external auditing.

INCREASED CAPACITY FOR GROWTH

To help lighten the load and set up for success, accounting firms are increasingly opting for outsourced audit support services. Outsourcing helps CPA firms to be productive and grow quickly without being restricted by talent shortages. Outsourcing allows you to scale up and manage a more significant workload. If you own a CPA firm, have recently begun your journey with a small number of clients, and are finding it challenging to retain clients or acquire new ones, scalability might seem like a dream. But with external support, you can quickly propel your growth as you will have access to experienced expert accountants to handle your firm’s accounting tasks while you can focus on your firm’s growth.

BETTER PROCESSES & TOOLS

Given how audit is a critical part of a business, audit services require expertise and the proper infrastructure. By outsourcing this function, not only will you be able to save the additional costs pertaining to infrastructure, but you will have access to the latest tools and audit software. Outsourced audit support services are a great way of building efficiency in both your business and team. Robust and scalable software can make complicated, tedious audits a snap. The best-outsourced audit support service providers use cloud-based software.

COST-EFFECTIVENESS & STEADY REVENUE

Outsourcing is generally cheaper than hiring someone in-house as it saves time and money required to hire, train, and retain them. It also relieves you from paying insurance, benefits, time-off, etc. You will also be saving the cost of software and maintenance costs. Accounting firms can enhance their service portfolio with audit support services to secure new clients. Result? Enhanced and steady revenue stream and an increased capacity to retain old clients. Not only will this help secure business but also help you survive the competition in the market.

DISADVANTAGES OF AUDIT SUPPORT SERVICES

COMMUNICATION BARRIERS

Accounting firms are concerned about the communication barriers when it comes to outsourcing critical accounting processes such as audit support services. Considering how communication is key to understanding the requirements and delivering quality work, accounting firm owners are worried if the talents they add to their team would be able to communicate effectively. But when you outsource your accounting firm’s audit to companies based in India, this shouldn’t be a concern at all. You will have access to highly qualified audit professionals who speak English and have excellent communication skills.

DATA SECURITY CONCERNS

Businesses are reluctant to take the outsourcing path because they are concerned about the security of their financial data. As with in-house departments, it becomes critical to exercise extreme caution when it comes to data protection. And it goes without saying that data security is of paramount importance to CPA firms when exploring outsourcing. They are worried about data breaches and the toll it takes on their reputation.

But as far as you partner with an outsourcing firm that ensures data security, this shouldn’t be a problem. In fact, the best outsourced audit support service providers employ encryption methods and have airtight data security measures in place. Your clients will have a perfect picture of how their businesses are doing as outsourcing enables virtual solutions that offer expert data protection.

COMPLIANCE & REGULATORY CHALLENGES

Responding to compliance and regulatory challenges is another concern that makes c-suite executives reluctant to consider outsourcing. The focus being client trust, CPA firm owners are worried about risks such as business continuity, information security, data privacy, and litigation risks. Such risks implicate the broader topic of compliance, and accountants think managing risk and monitoring compliance becomes challenging. But this shouldn’t be a disadvantage as you choose an outsourced service provider who is compliant and ISO 27001 certified for information security.

Apart from these, lack of flexibility, management difficulties, instability, etc., are also considered disadvantages of outsourcing accounting services. Sometimes offshore outsourcing might also present other challenges like hidden costs, etc. However, shortlisting the right outsourced audit support service provider can overcome these issues.

FINAL THOUGHTS

Regardless of why an accounting firm considers outsourced solutions, it comes with certain risks. But as far as you are diligent

Carefully examining the pros and cons of outsourcing critical accounting functions like audits is vital to ensure that the benefits outweigh the risks. Before signing up for a partnership with such third-party service providers, you need to plan what you will do whenever there is a problem. Alongside choosing an outsourced audit support service provider, your contract must mention all the necessary cases and solutions if issues arise. Thus, it is a great idea to partner with an outsourced service provider who offers all the advantages and has the solution to overcome all the disadvantages and challenges mentioned above.

QXAS Advantage

  • Less tedium & more precision guaranteed: Get access to hundreds of highly qualified auditors who will work as an extension of your team, and per your time zone
  • 12+ years of experience in outsourced audit support services & accounting outsourcing
  • Quick onboarding: Seamless process via which you can interview and preferred onboard candidates within 48 hours
  • India’s first GDPR & SOC 2 compliant accounts outsourcing company
  • Listed under IAOP’s top 100 global outsourcing list
  • 100% quality and security assured as we fully comply with ISO 27001 for information security and ISO 9001 for quality.

Book a Consultation

We hope you enjoyed reading this blog. Just book a call to find out how our outsourced audit support services can help your accounting firm scale quickly.

Originally published Aug 04, 2022 01:08:47, updated Aug 08 2022

Topics: Audit, audit support, audit support services, Outsourcing


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