Administrative accounting outsourcing and internal accounting departments in educational institutes

The aim of this research is to investigate the particularities that an organization displays in the costing process depending on the decision to use outsourcing regarding its accounting services compared to an internal accounting department. Consideration is also given to the simultaneous use of both options when the needs of the organization allow or demand different treatment depending on a case.

Creating an internal accounting department or working with an external partner responsible for the accounting and advisory activity in an organization is a basic practice. However, the advantages or drawbacks of such a choice are likely to exhibit some features that affect the organization and its capabilities in addressing a modern, rapidly changing and competitive environment.

Internal accounting department collaboration with external accountants and the knowledge they have in the costing process adopted by the organization are used as control variables. A hierarchical regression analysis attempts to identify the strengths and weaknesses that have a significant impact on the factors that affect the accounting function and the competitiveness of the organization.

Data from the education sector were collected through questionnaires answered by 388 internal or external accounting departments of private and public educational institutions. The questionnaires were initially sent to 1763 institutions with a response rate of 23,65% during 2016-2017. The chosen public institutions function autonomously regarding their resource management or through the procedures of budget accounting.

It is expected that the impact of management accounting in the decision-making process will vary according to the accounting-data analysis source. At the same time, it is possible that the degree of exploitation of administrative accounting capabilities and the specificities that appear in the organization's co-operation with its internal or external accounting department vary on a case-by-case basis.

This research is limited to the educational institution sector and lacks a deeper understanding regarding the problems faced by organizations. However it provides an interesting early analysis of the symptoms that appear. Through this review, organizations can understand the best way to exploit the capabilities of administrative accounting and tailor their accounting considerations by selecting internal or external partners according to the issue they are facing.