<p>I was considering being an accounting or an engineering major, and one of my teachers today said that accounting could be outsourced to India or China. Is this true? and if so, how much of accounting can be outsourced?</p>
<p>Accounting is already outsourced to external firms, so its not unimaginable. The Big4 and such make too much money to go anywhere anytime soon though.</p>
<p>^That’s pretty much what I was going to say. It’s obviously feasible.</p>
<p>to OP,</p>
<p>IMO, currently it would be difficult to outsource accounting for two reasons:
first, indian (uses IFRS accounting standards) and china (i dont know and i’m too lazy to look it up) use different accounting standards whereas the U.S. uses U.S. GAAP accounting standards. so it’s not like everything/majority of the work will be outsourced. </p>
<p>Plus, if you were a client you need an accounting firm that will audit your facilities. in order to audit the facilities you will need to have someone close by (not in india/china). Even if the company was an international company and they had locations in the U.S. and in India… one accounting firm will multiple locations would audit the US side and the indian side. </p>
<p>If you get into the tax side, of course this is completely different scenario. tax accountants in the us specialize in irs tax code. </p>
<p>Either way, as an accountant you’re pretty much safe</p>
<p>^can you explain what auditing is and why you need to be close by? thanks!</p>
<p>Auditing is the process of verifying that a company’s financial statements are presented fairly - that is what they say is what is true. If this process doesn’t happen correctly, you get Enron, WorldCom, etc. Auditors need to work on location of the companies they audit because not only do they audit a company’s financial statements (and would thus need verification of things like cash, AR, inventory, various liabilities, etc.), they also audit a company’s internal controls to make sure there is no management fraud going on. This can ONLY be done at a company’s headquarters/main operating locations. So unless all public companies decide to move to China, the profession will never be outsourced.</p>
<p>Basic accounting jobs aren’t out-sourced; the jobs are eliminated due to computer automation. But the computer programs create new jobs for accountants in controlling the management information systems.</p>
<p>Audits have to be supervised and signed off by a CPA or CPA firm. A Chinese audit firm signature is not acceptable. However, for multinational companies the US audit firm may subcontract work for an overseas subsidiary to its affiliate audit firm in the local country.</p>
<p>Yes, I work for a CPA & he knows an accounting firm who send all clients’ tax returns to China to be processed. Of course their tax clients do not know this!</p>
<p>Processing tax returns is not accounting. And I agree with you chris, computer automation is the only real threat to accounting jobs, that’s why so many universities have recently added “accounting information systems” as a major.</p>
<p>Uh…what? Have you taken “Accounting Information Systems”? You should understand after that class that transaction processing systems require a great deal of accounting knowledge to implement, maintain, and audit. </p>
<p>Computer automation is not a threat to the type of jobs you want to get as an accounting major. First of all, it has already arrived for all large companies. What happened earlier in the late 90’s and early 2000’s particularly is the integration of financial reporting software with other business functions. That’s what ERP systems provided by the likes of SAP and Oracle do. </p>
<p>As an accountant, either internal or external, it is important that you understand the flows of information, cash, and actual physical items within a business. The MIS guy that might understand the back end of SAP really well doesn’t understand why particular attention needs to be paid to determining whether a work order on a piece of equipment was repair or maintenance. As a CPA, you should understand that and how to design internal controls to ensure that decision is made properly. </p>
<p>SAP is not going to test for goodwill impairment for you. It’s not going to tell you how to recognize revenue for the multiple element deliverable that you are selling. It’s going to conveniently make sure that you can see each step as a requisition gives rise to a purchase order, receiving report, payment check, etc. You don’t have to debit inventory, credit AP, debit AP, credit cash, etc etc for every simple transaction. But accountants haven’t been doing that for a while.</p>
<p>Your entire post is based on a misreading of what I wrote. I’m sorry you misunderstood me and I’m sorry you’ll never get those moments of your life back.</p>
<p>You also shouldn’t assume that technology created and implemented years ago represents the end of technological advancement in that area.</p>