Name: Cheryl Leslie Lunday Schedule: ACCTG 324 (3:00 – 4:30 PM /

TTh)

AUDIT OF BPO INDUSTRY

(True or False Questions)
1. No matter what delivery model that your organization finds best to
support statutory reporting or other compliance tasks, there are four
elements that must work together in harmony to enable success:
people, process, data, and technology.
- TRUE
2. BPO cannot be an alternative to labor migration, allowing the labor
force to remain in their home country while contributing their skills
abroad.
- FALSE
3. Business process outsourcing (BPO) is the practice of contracting a
specific work process or processes to an external service provider. The
services can include payroll, accounting, telemarketing, data recording,
social media marketing, customer support, and more.
- TRUE
4. Back-office services pertain to the contracting company’s customers,
such as marketing and tech support.
- FALSE
5. Offshore vendors are located outside of the company’s own country.
For example, a U.S. company may use an offshore BPO vendor in the
Philippines.
- TRUE
6. Finance and accounting services would also cover a business’s
voicemail services, appointment schedules, email services, marketing
program, telemarketing, surveys, payment processing, order
processing, quality assurance, customer support warranty
administration, and other customer feedback.
- FALSE
7. Startup companies, for example, often need to outsource back-office
and front-office functions because they do not have the resources to
build the staff and supporting functions to preform them in-house.
- TRUE
8. An established company may opt to outsource a task that it had been
performing all along after an analysis determined that an outsourced
provider could do the job better yet at a higher cost.
- FALSE

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 9. Management experts advise enterprise executives to identify functions
that can be outsourced and then evaluate that function against the
pros and cons of outsourcing to determine if shifting that task to an
outsourced provider makes strategic sense for the organization
- TRUE
10. As an organization moves a function to a new outsourced
provider, it may not identify the scope of the work shifting from in-
house staff to the external partner.
- FALSE
11. Executives should also identify the key objectives for
outsourcing a function-whether it's cost savings, increased quality,
quicker turnaround or some other objective - and then use that criteria
to determine which provider would be best suited to handle the work.
- TRUE
12. BPO vendors are located all over the world, especially in
developed nations with low income tax.
- FALSE
13. Investors in the Philippine BPO industry are offered a sizeable
number of incentives, including tax holidays, tax exemptions on
imported equipment, simplified import procedures, and freedom to
employ foreign nationals.
- TRUE
14. Filipino employees are fluent in Western-accented English as
compared to their Indian counterparts but are not patient.
- FALSE
15. Philippines focuses on growing industries in both voice and non-
voice sectors such as global in-house centers (GICs), healthcare
information management, animation, and gaming also ensured future
BPO growth in the country.
- TRUE
16. In outsourcing, especially when information systems (IS) are
involved, companies do not face communication and privacy risks
- FALSE
17. Potential data privacy breaches and vulnerability disclosures are
a real threat, particularly with the current prevalence of hacking. The
internet, which makes BPO for IT feasible, also may offer a portal
through which hackers enter.
- TRUE
18. Companies that employ BPO vendors often overestimate the
running costs, especially in upgrades and contract renegotiation.
- FALSE
19. Once a company designates a vendor for specific processes, the
vendor becomes a part of the workflow. The company can incur

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 extraneous costs and decreased productivity when the vendor
encounters problems or lapses in its work.
- TRUE
20. Vendors often replace veteran employees with more
experienced workers to keep costs down, and quality suffers as a
result.
- FALSE
21. Language barriers can limit activities when your company hires
individual service providers spread across the globe. This can result in
delays in new processes and curbs on feedback from different
departments.
- TRUE
22. When outsourcing your processes and parts of your business,
you face insignificant risks, depending on the type and structure of
your company.
- FALSE
23. In very large segmented companies, outsourcing only the back
data entry can carry a low risk, but for a small business that is reliant
on BPO as part of its manufacturing, the risk increases.
- TRUE
24. A form of government support for the Philippine BPO industry is
the Special Economic Zone Act that provides tax incentives but not
exemptions, and other privileges to foreign investors.
- FALSE
25. Other possible risks associated with outsourcing include: data
breaches, quality control, operation restoration, nonlocal employees,
maintenance of strategic alignment, political instability, changes in
technology and exposure to hacking, and specialization to the point
that the niche demand is no longer necessary.
- TRUE

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