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Management accounting and risk management practices in financial institutions

Abdul Rasid, Siti Zaleha and Abdul Rahman, Abdul Rahim (2009) Management accounting and risk management practices in financial institutions. Jurnal Teknologi, 51(E). pp. 89-110. ISSN 2180–3722 (O), 0127–9696 (P)

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Abstract

The aim of this paper is to report the results of a study on management accounting and risk management practices in financial institutions. The research method involved administering a questionnaire to 106 financial institutions listed on the Malaysian Central Bank’s website and the respondents were the chief financial officers (CFO) or the most senior positions in the finance department of the institutions. Based on the IFAC’s (1998) framework, it was found that the most widely practiced were the management accounting practices at Stage 1, followed by practices of Post 1995. This finding shows that despite the emergence of contemporary management accounting practices (Stage 4 onwards), traditional management accounting that focuses on financial performance and budgetary control is still widely practiced by financial institutions in Malaysia. As for the risk management practices, most of the firms have either implemented a complete or partial Enterprise Risk Management (ERM) framework. The findings from the survey showed that management accounting practices related to financial statement and ratio analysis were perceived to contribute most towards risk management. Budgetary control, budgeting and strategic planning were also perceived to be important in managing operational risks.

Item Type: Article (Journal)
Additional Information: 1576/1131
Uncontrolled Keywords: Management accounting, risk management, financial institutions
Subjects: H Social Sciences > HF Commerce > HF5001 Business. Business Administration
H Social Sciences > HF Commerce > HF5001 Business. Business Administration > HF5601 Accounting. Bookkeeping
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences
Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Ms Zati Atiqah Mohamad Tanuri
Date Deposited: 21 Jul 2011 08:37
Last Modified: 21 Jul 2011 08:37
URI: http://irep.iium.edu.my/id/eprint/1131

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