Association of Chartered Certified Accountants (ACCA) Certification Practice Test

In which type of outsourcing does a company hire another firm occasionally?

1. Project outsourcing

2. Partial outsourcing

3. Total outsourcing

4. Ad hoc outsourcing

The correct answer is: Ad hoc outsourcing

The correct answer is ad hoc outsourcing because it specifically refers to the practice where a company engages another firm for a particular task or project on an irregular or occasional basis. This type of outsourcing allows for flexibility and can be used when there is a need for specialized skills or resources that are not part of the company’s regular operations. Ad hoc outsourcing is particularly useful for businesses that may not require continuous external help but need external expertise at specific times. In contrast, project outsourcing typically involves outsourcing an entire project to another company, which can imply a more structured and long-term engagement rather than occasional hiring. Partial outsourcing refers to delegating certain functions or processes, but it can also imply a more ongoing relationship rather than sporadic engagements. Total outsourcing indicates that a company has chosen to transfer all its processes or functions to another entity, which is the opposite of occasional hiring. Thus, ad hoc outsourcing is uniquely characterized by its occasional nature of engagement with external firms.