Revised Outsourcing Standards For U.S. & International Contracts To Be Implemented In June

March 17, 2011

Despite the political rhetoric behind outsourcing and President Obama’s warning to curb shipment of jobs overseas, outsourcing jobs from the U.S. to other nations is on the rise, reports news.cincinatti.com.

The major factor influencing outsourcing of functions is that there are specialized outlets that can get the work done cost efficiently. Moreover, to stay ahead of competition, the global economy supports outsourcing as an efficient tool.

Major business roles that are outsource currently include everything from IT data center hosting, processing orders, benefits administration, payroll, office security and printing services. However, Bill Moore writes in a guest column on cincinnatti.com that along with the opportunity of outsourcing business operations comes the risk of not properly carrying out business functions. In other words, the actual way in which business functions are carried out are not properly governed or supervised.

However, the report also says that there will be international and U.S. service organization standards for firms, whether they are public/private, small/large or if they have domestic or global outsourcing ties. The U.S. Statement on Auditing Standards No. 70 was the standard controls used in the U.S. since 1992. In order to protect companies, the American Institute of Certified Public Accountants has released a new protocol that will substitute for SAS 70.

This new standard will come into effect on June 15 and will be called the Statement on Standards for Attestation Engagements (SSAE) 16. This standard concentrates more on internal control than on financial reports. It may also be utilized for reporting on operations goals and compliance, which is known as AICPA’s other attestation standards.

Companies are advised to adhere to the new standards right away – even if management has decided to wait till the date that it goes into effect. For the most part, keeping in line with standards will depend on what is already in place at a firm.


Comments

Got something to say?