Helena Sjogren
Researcher, Lappeenranta University of Technology, Finland.
Kaisu Puumalainen
Professor, Lappeenranta University of Technology, Finland.
Pasi Syrja
Researcher, Lappeenranta University of Technology, Finland.Does Outsourcing of Accounting Services Affect the
Management Accounting Practices in Small Firms
Business planning plays a crucial role in small firm’s growth and
survival. A formal financial and strategic planning may be beneficial
also for smaller firms. Past studies have pointed out that the
accountants have an important role in increasing the financial
awareness of the owner-managers and accountants are the one of the
most important source of external business advice among SMEs.
Unfortunately the current demand for the accountant’s services is often
driven only by the statutory requirements. This means that some
owner-managers are buying the accountant services only because they
are forced to by regulation. Many researches have shown that owner-
managers of small firms derive little benefit from the outputs of
statutory financial accounts and some of them even do not understand
the information they contain.
The empirical data used to test the hypotheses were drawn from a
mail survey conducted in autumn 2008 by means of a structured
questionnaire. The initial population consisted of small private limited
companies in the south Finland (they typically have few shareholders
and are usually owner-managed family businesses) with a sales
turnover between 1 and 10 million euros. Final responses were received
from 216 companies, yielding a satisfactory effective response rate of
21.3 % (216/1013). It was possible to get financial information about the
companies via Voitto+ database; these financial measures are based on
the financial statements of years 2006 and 2007.
This paper aims to contribute to the existing knowledge of
management accounting practices in small firms the following ways:
firstly, we are going to demonstrate that if accounting services are
outsourced in small Finnish firms, owner-managers does not exploit the
financial information. Secondly, if accounting services are not
outsourced, the role of auditor will be more significant.