Volume 5, Issue 11, November 2011, Pages 1696-1703
Document Type: Article
Source Type: Journal
Outsourcing of accounting functions in the context of SMEs in emerging economies: Transaction cost economics perspective
a Department of Accounting, Qaemshahr Branch, Islamic Azad University, Qaemshahr, Iran
b Faculty of Business and Accountancy, University of Malaya, Malaysia
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
Accounting functions; Outsourcing; SMEs and Iran; Transaction cost economics theory (TCE)
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