Open Journal of Accounting

Volume 11, Issue 2 (April 2022)

ISSN Print: 2169-3404   ISSN Online: 2169-3412

Google-based Impact Factor: 0.71  Citations  

Assessment of Management Accounting Decision Making in Banking: Alignment and Appropriation of Distribution Cost

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DOI: 10.4236/ojacct.2022.112010    426 Downloads   2,167 Views  
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ABSTRACT

This study investigated how the management accounting decision-making framework is applied in the alignment of distribution cost within the banking business model by analyzing the extent of pass-through of commercial banks’ distribution cost to interest rates on loans and advances. Data from 2010 to 2018 on commercial banks’ lending rate and financial statement variables thought to influence commercial banks’ distribution cost structure were extracted from the annual financial reports of ten commercial banks. Using the Arellano-Bond and Bover Dynamic Panel Generalized Method of Moments Estimator (GMM), the study finds that, the pass-through from commercial banks’ cost structure to lending rate is significant but low. It was ascertained that, a percentage increase in commercial banks’ cost structure causes an increase from 11% to 15% in lending rate. The study further finds a long-run relationship between cost expenditure of commercial banks’ and the factors thought to influence cost structure. Cost management and strategic pricing behave our other than what economic theory proposed were eminent in the findings of this study.

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Darkwa, P. (2022) Assessment of Management Accounting Decision Making in Banking: Alignment and Appropriation of Distribution Cost. Open Journal of Accounting, 11, 180-198. doi: 10.4236/ojacct.2022.112010.

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