Outsourcing of accounting functions in the context of SMEs in emerging economies: Transaction cost economics perspective

Australian Journal of Basic and Applied Sciences
Volume 5, Issue 11, November 2011, Pages 1696-1703

ISSN: 19918178 Document Type: Article Source Type: Journal

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Outsourcing of accounting functions in the context of SMEs in emerging economies: Transaction cost economics perspective

Kamyabi, Y.^a , Devi, S.^b

^a Department of Accounting, Qaemshahr Branch, Islamic Azad University, Qaemshahr, Iran
^b Faculty of Business and Accountancy, University of Malaya, Malaysia

Abstract

This study aims to identify the factors that affect Iranian manufacturing SMEs' decision to outsource accounting functions (activities) using a transaction cost economics (TCE) perspective. Based on a questionnaire survey data of 658 Iranian manufacturing SMEs, this study found support for three TCE predictions, that is, asset specificity, frequency and trust in accountant, which are significantly associated with the accounting function outsourcing intensity. The other two predictors that were examined, that is, behavioral uncertainty and environmental uncertainty, were not significantly associated with accounting function outsourcing intensity. Therefore, we provide a specific, theoretically and empirically grounded prediction of how TCE attributes influences outsourcing of accounting functions with implications for theory and practice.

Language of original document

English

Author keywords

Accounting functions; Outsourcing; SMEs and Iran; Transaction cost economics theory (TCE)

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