Trust and control mechanisms and risks in accounting outsourcing among selected small businesses in Pasig City towards an improved risk management program [electronic resource] / Lara Melissa D. Danao.

Thesis (Master of Business Administration) -- Adamson University, 2023.

This study focuses on the role of trust and control mechanisms in risk reduction in accounting outsourcing for small businesses in Pasig City. The study aimed to determine the extent of trust and control mechanisms and their correlation with relational and performance risks in accounting outsourcing. A quantitative approach, namely a descriptive correlational design, was used to collect numerical data through surveys. The respondents were owners, general managers, and finance or accounting managers from small businesses operating in various industries in Pasig City. Simple random sampling was used to select respondents. The research instrument used a modified version of measurement items from previous studies. Data collection was done through face-to-face surveys and online questionnaires. The findings indicate a strong level of trust in the goodwill and competence of the outsourcing providers, with behavioral control and output control being consistently successful. However, social control was present less regularly. Relational and performance risks were found to be at a moderate level. The study revealed a weak relationship between trust and control mechanisms and risks in accounting outsourcing. Based on these findings, recommendations for small businesses include fostering open communication, establishing clear roles and responsibilities, aligning incentives with company goals, maintaining a strong contractual framework, conducting selection due diligence, and regularly evaluating the outsourcing relationship. By implementing these recommendations, small businesses can effectively manage risks and maximize the benefits of accounting outsourcing. Keywords: trust, control, risks in accounting outsourcing, risk management, small businesses