Casper, Wyo. (March 17, 2004) -- Accountants In India, a global employment start-up that matches understaffed U.S. CPA firms with trained tax and accounting professionals in India, is urging American practices to disclose to their clients the extent to which they outsource services.

In a white paper addressed to the accounting community, AII states, "If you are working with a staff member that is located outside of the United States, we recommend that you disclose to clients the locations of the staff and offices up-front, and reassure them that the same security and supervision applies throughout your organization."

AII's position goes a step beyond the American Institute of CPAs' Code of Professional Conduct, which does not require members to advise clients regarding their use of a third-party service provider.

"Such disclosure is at the sole discretion of the practitioner," as the AICPA reminds its membership in an article published in this month's issue of the Journal of Accountancy. However, the code specifically states that a member remains responsible for ensuring the accuracy and completeness of the services rendered by any third party.

In making its own disclosure recommendation, "We're raising the bar as to what needs to be done," said Wayne Harding, chief operating officer for AII. Repeated instances of computer security breaches, "and especially with identity theft skyrocketing," make it mandatory that CPAs be completely forthcoming about their use of outsourcing, he contended. It's especially important that accountants do so to protect their status as "trusted business advisors."

"As far as we can tell, most of the top 100 CPA firms in the U.S. are doing some form of business process outsourcing," said Harding. AII's own roster of CPA partners are already telling clients about their use of outsourcing, noted AII chief executive K.C. Truby. "We have not heard one negative comment from an actual end user," said Truby.

In its white paper, AII "strongly recommends" that accountants tell their clients how they (1) safeguard their information in their office and on their servers; (2) securely transmit sensitive data; and (3) closely supervise access to authorized parties only.

--Richard McCausland

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