Study On The FAO Risk Elusion

With the course of world economic integration being accelerated, the Chinese enterprise will be confronted with fierce market competition gradually. At the moment of the economy environment changing and the organization need continual readjustment, the topic for discussion that the corporation should fully utilize outsourcing to boost enterprise transforming,accelerate professionalization and be absorbed in development of core business has become more and more hot. As one kind of reforms in the modern world, outsourcing has been adopted by more and more enterprise. However, not all of the business have a clear view for what to outsourcing, how to manage outsourcing, which bring about the fall in the process of outsourcing. On the other hand, because of the benefit differs from one another, the under-control service contractor had misgivings about unfair profit distribution. So the contractor will be able to reserve his capability to some extent during the cooperation period of the agreement. Therefore, in the process of entire outsourcing, enterprise will definitely accept various risks, and confront gigantic challenge.In the wake of the financial & accounting outsourcing (FAO) springing up, more and more project choose to outsource its financial affairs.The FAO can make enterprise shaking off the inferior, time-wasting time and laborious financial accounting process, but may possibly bring new risk to new risk and challenge. The enterprise should outsourcing the weaker business process to the contractor, and does its duty of administration, supervision and valuation. Besides, it should distinguishes the relevance risk of FAO, and practice effective risk-mitigation measure in the key of contracting, communicating and ending to realize even exceed the FAO expectation target. So, the research and analysis for the FAO risk elusion, is beneficial to change the phenomena of "outsourcing risk blindness", guide the corporation practice FAO risk manage, answer risks and strengthen core competition.Started with the relevance conception of FAO risk, the opinions of FAO and the its risk relevant definition from the predecessors were enumerated. Accounting to Transaction Cost Theory, Principal-Agent Theory, Comparative Advantage Theory, Core-Competitiveness Theory and Risk-Strategic-Management Theory, the article emphasize the necessity of FAO risk elusion from the need of sponsor, manager and the enterprise, and give three characteristic of this kind of risk elusion, that is to say, dice game and cooperate together, the nail effect and transitivity. The Second and the third chapters analyze the current situation of FAO risk elusion in terms of our country enterprise's practical experiences, classify sum up seven risks: the safeguard risk, the choose risk, the leadership risk, the incompatible risk, the safety risk, the quality risk and the retreating risk. And then suggest that the causes leading to seven above-mentioned risk lie in the relevance legal norm deletion, the FAO contractor market weak in strength, the FAO leading predicament, the mutual cultural differs, the information leakage, weak communication and over dependent.The fourth chapter compares the diversities in the legal environment, marketplace environment and enterprise's quality of the home and abroad, combining with the international successful FAO case. And study the main risk confronted and the measure taken by the foreign corporation, to provide draw lessons affairs for our country business FAO risk elusion.When the FAO brings forward benefit for enterprise, it also produces much risk. So the corporation should answer risk with active attitude, evade risk by scientific and rational measures. In the fifth chapter, the article proposes that the government should speed up the laws and regulations construction on FAO, should develop the high-standard accounting service profession. And proposes the enterprise should set up the outstanding financial outsourcing leadership team, strengthen the communication with the contractor & staff, and perfect the FAO contract to structuring the safe information fortress. Besides, the corporation should enhance supervision, and keep itself competitive on financial and accounting process.This article is mainly qualitative analysis, secondly quantitative. It is base on the theoretical analysis, supplemented by proper graph and table, with relevant case. Through solid & rigorous research method and lively research content, it researches on the FAO risk elusion to provide new view for China's FAO risk elusion, to encourage the FAO market developing healthy.