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Outsourcing of Accounting Tasks in SMEs: An extended TCE Model

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  • P. EVERAERT
  • G. SARENS
  • J. ROMMEL

Abstract

This study explores why small and medium-sized companies (SMEs) engage in outsourcing of accounting services. We expand the transaction cost economics model by adding the variable resource deficit from resource-based theory, while controlling for personal characteristics of the SME executive (age, education), organizational structure, firm maturity and ownership structure. We find that resource deficit, asset specificity and frequency are the most significant drivers of outsourcing intensity with respect to accounting. Furthermore, the educational background of the CEO seems to play an important role, as well as the presence of a separate CFO function within the firm.

Suggested Citation

  • P. Everaert & G. Sarens & J. Rommel, 2006. "Outsourcing of Accounting Tasks in SMEs: An extended TCE Model," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/409, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:06/409
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    File URL: http://wps-feb.ugent.be/Papers/wp_06_409.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Raymond A. Ezejiofor & Ezenyirimba Emmanuel & Moses C. Olise, 2014. "The Relevance of Accounting Records in Small Scale Business: The Nigerian Experience," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(12), pages 69-82, December.
    3. Mazhindu Kenneth & Mafuba Grayzina, 2013. "The Adoption of International Financial Reporting Standards for Small to Medium Enterprises in Zimbabwe," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 3(11), pages 2315-2349, November.
    4. Meira, Liliana & Peixoto, Joao Paulo, 2017. "Qual a importância da Auditoria Operacional nas PME Portuguesas? [The importance of the operational audit of Portuguese SMEs]," MPRA Paper 80113, University Library of Munich, Germany.
    5. Ewa Walińska & Justyna Dobroszek, 2021. "The Functional Controller for Sustainable and Value Chain Management: Fashion or Need? A Sample of Job Advertisements in the COVID-19 Period," Sustainability, MDPI, vol. 13(13), pages 1-20, June.

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    Keywords

    outsourcing; accounting; SME; transaction-cost theory; resource-based theory;
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