Swimming Against the Tide: The Hidden Costs of Offshoring

Summary

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Advances in technology have meant that many of the services once performed as personal professional services, including tax preparation, can now be electronically exported via the Internet to lower-cost workers in emerging-market countries. As someone who has engaged in tax-preparation services, the author knows that there is simply no substitute for face-to-face contact with the client. Important, tax-saving information can be transmitted between the client and tax preparer during a live interview. Many clients may be disturbed to find out that their return is outsourced to an overseas processing center. The prospect of fomenting client ill will is why firms engaged in this activity may be reluctant to disclose it. CPAs that outsource tax-preparation engagements to a third party must be careful not to violate standards and regulations promulgated by both the AICPA and the IRS.

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Swimming Against the Tide: The Hidden Costs of Offshoring

Advances in technology have meant that many of the services once performed as personal professional services, including tax preparation, can now be electronically exported via the Internet to lower-cost workers in emerging-market countries. According to Forrester Research, 3.3 million professional positions, mostly in information technology and financial services, will move offshore by 2015.

An Off shoring Primer

To its proponents, offshoring offers tangible benefits: Routine, labor-intensive tasks can be performed at a much lower cost in developing countries. U.S. manufacturers bega...

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