There’s lots of buzz in accounting circles these days about outsourcing the preparation of tax returns to places like India. And now the AICPA, a professional association for CPAs in the United States, has issued an Advisory opinion which clears the way for CPAs to outsource.
The Advisory doesn’t expressly endorse outsourcing — it stops well short of that. But it does indicate there are no outright legal prohibitions.
Of course it cautions CPAs that they have certain responsibilities to ensure security and privacy of their clients’ data when outsourcing. The Advisory summarizes those obligations:
- “AICPA members have responsibilities related to the practice of using third parties to provide services in engagements for clients. Primary among them are security and confidentiality of information, due professional care and compliance with provisions of the Code of Professional Conduct. In addition, members must monitor security procedures that third-party providers have put into place to ensure they remain effective.”
The Advisory is being published in the March 2004 edition of the Journal of Accountancy, but you can download a copy here.
In case you have been on another planet for the past six months, offshore outsourcing is a polarizing issue right now in the United States. Fears of U.S. workers losing jobs and U.S. corporations losing competitive edge are being debated at every turn. Professional workers are even considering unionization.
In places like India, however, outsourcing is good news (as long as the outsourced work is going to India). And in India the AICPA’s position was greeted as a positive move. It is estimated that preparation of tax returns could mean the inflow of $15 Million (USD) in 2004 to Indian business process outsourcing partners.