Offshoring finance has become a common practice. It helps many accounting firms in the United States. It seeks to cut costs and improve efficiency. But, offshoring also presents a significant compliance risk. This is particularly regarding U.S. regulations. Accounting firms are held to higher regulatory compliance standards. So, they need to take additional steps to ensure compliance. That's why Fino Partners is here to share steps to help you.
This article deals with the opinion experts in the United States in offshoring accounting & bookkeeping. It also explores the importance of these in business.
Ensuring compliance while offshoring
CPA and accounting firms in the U.S. need to ensure compliance. They should keep in mind seven steps when offshoring finance. It involves:
Maintain Confidentiality and Data Security
Maintaining confidentiality and data security are important areas in business. It helps in handling sensitive financial information. CPA and accounting firms should ensure that the offshore service provider has appropriate data security measures. It involves firewalls, encryption, etc. Companies should also establish protocols for handling financial data. After all, firms should ensure that the offshore service provider complies with privacy laws.
AICPA Protocols: Compliance
The American Institute of Certified Public Accountants (AICPA) provides protocols. It guides offshoring accounting. Accounting firms should ensure that offshore service providers follow these guidelines. It includes maintaining independence, complying with the AICPA Code, etc. It also ensures that the work is performed or not. Firms should also ensure the offshore service provider is licensed. They also focus on the providers who are registered with the regulatory bodies in their country.
Verify Compliance with SOX and SEC Regulations
Accounting firms are subject to additional regulations. These regulations require firms to maintain financial records. It also assures the effectiveness of internal controls. Firms should verify whether the offshore service provider complies or not. It involves assurances on internal controls, maintaining audit trails, etc. These ensure that financial records are accurate.
Establish Communication Channels
Effective communication is essential when offshoring finance. CPA and accounting firms should establish clear communication channels. It can be done with the offshore service provider. It involves regular reporting and feedback mechanisms. Firms should also ensure that their offshore team can understand U.S. regulations and AICPA guidelines.
Conduct Regular Audits
CPAs and accounting firms should conduct regular audits. It ensures ongoing compliance with U.S. regulations. These assessments should include a review of the offshore service provider's compliance. It is applicable to regulations and an evaluation of data privacy measures. Firms should engage an independent auditor to conduct these assessments. Thus, it provides recommendations for improving compliance.
Provide Regular Training
Ongoing training should be provided to the offshore team. It ensures that they remain up to date with U.S. regulations. CPA and accounting firms should provide regular training on data security. This also helps with privacy and compliance with U.S. regulations. Firms should also ensure that the offshore team is trained on the specific procedures of the organization.
Non-Compliance: Planning
Non-compliance may occur when offshoring finance and accounting tasks. CPA & Accounting firms should have a plan to address non-compliance. It involves clear protocols for reporting and investigating potential breaches. The strategy for addressing any resulting reputational risks is also a part of it. Thus, it is essential for non-compliance with U.S. regulations.
Winding Up Note
U.S. experts generally believe that offshoring accounting and bookkeeping. They believe that it provides cost savings. It also allows access to skilled professionals. But, caution that it may also lead to security risks. After all, it is recommended to weigh the pros and cons before making a decision.
Fino Partners, with its outsourced accounting space, uses its proprietary framework called DPPT - Definition, Process, Precision & TAT, which has been the mantra of success for supporting firms in the U.S. to stay ahead of the competition.
By partnering with an experienced offshore bookkeeping services provider like Fino Partners, CPA firms can access a team of professionals knowledgeable about the latest technologies, up to date with ever-evolving accounting norms, and domain experts in U.S. accounting.
