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Factors Influencing Accounting Outsourcing Using the Transaction Cost Economics Model

Author

Listed:
  • Ivana Tomašević

    (Faculty of Business Economics and Law, “Adriatic” University, 16 Rista Lekića, 85000 Bar, Montenegro)

  • Sandra Đurović

    (Faculty of Business Economics and Law, “Adriatic” University, 16 Rista Lekića, 85000 Bar, Montenegro)

  • Nikola Abramović

    (Faculty of Business Economics and Law, “Adriatic” University, 16 Rista Lekića, 85000 Bar, Montenegro)

  • Lidija Weis

    (Ljubljana School of Business, Tržaška cesta 42, SI-1000 Ljubljana, Slovenia)

  • Viktor Koval

    (Department of Business and Tourism Management, Izmail State University of Humanities, 68601 Izmail, Ukraine)

Abstract

This paper presents the results of research conducted to identify the factors that influence the decisions of company management to outsource accounting services. A transaction cost economics (TCE) model was used to analyse factors that influence high levels of outsourcing of accounting tasks in the case of Montenegro, where, based on our sample, 75.4% of companies enter outsourcing arrangements with bookkeeping agencies or with external accountants. With an adaptation of International Accounting Standards (IAS) and legal requirements for submission of standardised year-end reports, there is evident growth of bookkeeping and financial service providers on the market and an evident trend of companies entering accounting service outsourcing with those agencies. A survey was developed to investigate 12 variables that, according to the TCE model, influence outsourcing decisions. The selection of variables was based on previous research in the field using the TCE or Resource-Based View model (the most common models used for this analysis). In contrast, new variables were introduced that measure the effects of the introduction of IAS through legal reporting obligations in Montenegro. By developing the model this way, it became possible to predict 47% of the variance of the dependent variable and to identify the main factors (other than price) that influence the decision of managers to outsource accounting services.

Suggested Citation

  • Ivana Tomašević & Sandra Đurović & Nikola Abramović & Lidija Weis & Viktor Koval, 2023. "Factors Influencing Accounting Outsourcing Using the Transaction Cost Economics Model," IJFS, MDPI, vol. 11(2), pages 1-17, April.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:2:p:61-:d:1114861
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    References listed on IDEAS

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    1. Kakabadse, Andrew & Kakabadse, Nada, 2002. "Trends in Outsourcing:: Contrasting USA and Europe," European Management Journal, Elsevier, vol. 20(2), pages 189-198, April.
    2. Cooper, Christine & Taylor, Phil, 2000. "From Taylorism to Ms Taylor: the transformation of the accounting craft," Accounting, Organizations and Society, Elsevier, vol. 25(6), pages 555-578, August.
    3. Mashayekhi, Bita & Mashayekh, Shahnaz, 2008. "Development of accounting in Iran," The International Journal of Accounting, Elsevier, vol. 43(1), pages 66-86, March.
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