Research On Application Of Management Accounting Reporting In China’s Commercial Banks

Against the backdrop of new age, economical globalization is developing in a wide-ranging and deep-going fashion. Financial liberalization expands its influence coupled with increasing merging and acquisition of the commercial banks across nations. As a result, the present era witnesses a trend of banking globalization. Domestic financial market is going through a tremendous transformation.With the lifting of the domestic financial regulations, and higher degree of opening up to the outside world, foreign banks, Citibank, Standard Chartered Bank, and Hang Seng Bank, has established branches and agents in China, which brings with it the tremendous pressure rising from their time-honored history, sufficient capital funding and state-of-art management.June7.2012, the central bank of China announced a downward adjustment of the financial institutions RMB deposit and loan benchmark interest rate since June8,2012. It can also be seen from this year’s government working report that China will continue to steadily push forward market-oriented interest rate reform. The control of the bank interest rates in2013will be further relaxed. The decision-making right of the interest rates will be gradually hand over to the financial institutions in the market. How to properly price the rate is a challenge for the bank management and determines the bank’s performance and future development.In addition, in recent years, the capital market, especially the rapid development of the bond market, the internationalization of the RMB and the reinforcement of the financial regulation bring subtle change to both the economic environment and the operating mechanism in the banking sector and make competition between banks increasingly fierce. On the other hand, the traditional business management methods of commercial banks in China have a lot of problems, which makes it difficult for banks to cope with the enormous challenges of the new era of financial markets. The original extensive financial management mode cannot meet the needs of the development of the domestic and international markets and deal with complex problems in reality. Thus, in such a situation, commercial banks strongly call for the financial meticulous management.The two of the most important selecting standard of bank stocks of Warren Buffett who is famous for his miracle investment performance in the financial markets, are business performance and management. Moreover, due to the high ratio of the bank’s assets and equity, management strengths and weaknesses will be several times enlarged and thus, banks with good management often have good performance. That is, the level of management is an important benchmark for the evaluation of the prospects and development potential of a bank.The complex domestic and international economic and financial situation urges banks to improve their management. Management accounting, as one of the basic work to enhance the competitiveness of the Bank, is an extremely important aspect of the bank management, especially owing to the fact that banking is an operation of special products. The central bank former deputy Xiaoling Wu has repeatedly pointed out that without the support of the management accounting system, it is difficult for Chinese banking sector to achieve a breakthrough innovation and improve competitiveness.The level of management accounting often determines the quality of the bank’s internal operational management. Good application of management accounting is the premise and guarantee of bank meticulous management. Nowadays, the bank’s internal management accounting has become increasingly prominent. Presented as an information carrier and the results of the management, management accounting reports, attracts unprecedented attention of both the theoretical and practical circles.Better application of management accounting reports in Chinese commercial banks is a necessary step in push forward the modernization and internationalization process of Chinese commercial banks and a strong backing and powerful weapon for Chinese bank to compete in international market. The application of management accounting reports in Chinese commercial banks will enhance the competitiveness of our banking and have a profound impact on the status of our country’s role in the international financial markets as well as a new world financial pattern in the distribution of benefits.Even through the importance of management accounting reports are more and more recognized by people, the current theoretical research on management accounting reports is not in-depth. Research scholars such as Xianzhi Zhang, Yuhong Wang, Hongtao Mao focus on the manufacturing sector as a research background, while management accounting reports in applied research in the banking sector is almost blank. My article chooses the banking industry as background to research on management accounting reports for commercial banks. To rich management accounting report content is to deepen the depth of bank management accounting research. In summary, this study has great significance, both from the point of view of practical and theoretical.This thesis is composed of six chapters. They are as follows:Chapterl:The first chapter is the introduction of this thesis, including the present banking trend at home and abroad, the change of economic environment and the necessity of study on applications of management accounting reporting in China’s commercial banks. Moreover, the strength and weakness of this research are analyzed.Chapter2:The second chapter is the literature review of management accounting reporting in commercial banks, summarizing and reviewing the present situation of management accounting reports at home and abroad, which is the theoretical basis of this thesis.Chapter3:The third chapter is the research on the status quo of management accounting in China Citic Bank Chengdu Branch by interview, survey and so on, including its application in the budgeting, cost control, risk management and performance appraisals.Chapter4:The fourth chapter is the questionnaire survey of management accounting in China Citic Bank Chengdu Branch. The questionnaires on decision-making value and action mechanism of management accounting reporting are designed. The full information about management accounting reporting in China Citic Bank Chengdu Branch is obtained by data analysis. We analysed the application status and application effect of Citic bank Chengdu branch, thus to have a comprehensive understanding of management accounting reports of CITIC bank Chengdu branch,from the source to the terminals, from the overall to local, from running to the effect.Chapter5:The fifth chapter reflects the problems of the application of management accounting reporting in China Citic Bank Chengdu Branch and instructive suggestions are put forward.Chapter6:The last chapter is the conclusion of this research and prospect of future management accounting reporting in commercial banks.To sum up, The author expects such research can be of great help in applying the management accounting reports in China’s commercial banks, which can improve their management. What’s more, this thesis is expected to make some contributions to the modernization of China commercial banks and to improve their international competitiveness.The contribution of this paper has three main aspects:Firstly, the paper topics is novel, as a combination of management accounting reports and commercial bank management accounting, which is a gap not for most people concerned about. As a new research perspective, we can continue to delve into the depths, creating and enriching applied research of management accounting reports in the banking industry.Secondly, the research is solid. In order to carry out this study, I had access to a large number of documents, books, files, we had field observation and interviews, including formal and informal. we specifically designed the questionnaire, sent out and took it back, analyses data finally.Thirdly, based on research and investigation, we draw two conclusions:(1) Management accounting reports are widely used in CITIC Bank Chengdu branch, fully reflecting the bank’s interior operation management, and have a higher decision-making value.(2) The creative management accounting system of Citic Bank Chengdu Branch, and management accounting reports coming from this system, is of great significance for enhancing the bank’s management level and overall competitiveness. At the same time, we analyzed the main reasons for its existence, the problems of management accounting reports in Citic Bank Chengdu branch, and propounded targeted recommendations, which is of great significance for guiding the further development of management accounting reports in the commercial banks.The research itself is flawed with limitation in the sense that samplings are not sufficient, that they are not representative and the depth is not quite satisfactory. Looking into the future, efforts should be strengthened to enrich the sampling, widen the investigation and develop study in depth, in a bid to make the research in Management Accounting more sound and thorough, which put the pragmatic study of Management Accounting in commercial banks on a more solid footing.