The Extent of Implementing Responsibility Accounting Features in the Jordanian Banks

Abstract

This study aims to identify the extent of implementing responsibility accounting in the Jordanian banks. And the data of the study was collected by distributing 55 questionnaires on the sample of the study which represented the employees of the Jordanian banks from different administrative levels as general managers, departments’ managers, the branches’ managers and ordinary employees.  Fifty questionnaires were retrieved. After data was analyzed using  SPSS, the study concluded that the Jordanian banks commit to the application of  the potential  responsibility accounting regarding  the division  of the  organizational structure into centers of responsibilities, the authorization the mangers of the responsibility centers with clear powers, the distribution of costs and the revenues to responsibility centers according to the  center’s ability and validity, the  previous linking  of  the estimated budgets with the responsibility center, using the budgets for control and the performance evaluation through comparing the actual  performance with the planned one for each responsibility center, preparing reports which analysis the deviations of the real performance of the plan, the existence of system of incentives correlated with the results of the responsibility centers but  these banks do not commit to some details of these  potentials  as not every responsibility center perform one type of activity, non-participation of the employees of the  responsibility center in preparing the center’s budget according to every one’s work, the reports’ lack of interest of the  responsibility center’s performance regarding the non-financial aspects, and the employees’  non-satisfaction  of the system of the incentives used in their banks. And the study came up with a number of recommendations as follows: the necessity for the  Jordanian banks to involve  all the employees who work  in the centers of responsibility in setting goals and preparing the  estimated budgets of their centers according to every one’s specialization and potentials, the necessity  of   cooperation between the Central Bank, The Association of  Banks and the administrations of the banks  in developing  a guide to be recommended for application in the Jordanian banks  includes the objectives, features and the advantages of using the responsibility accounting, the necessity of the professional associations as the association of  banks  to encourage the banks to use  the other modern methods of the administrative accounting in their business  as the application of Activity Based Costing system (ABC), Activity-Based budgeting  System (ABB) and the  Balance Score card (BSC).

Keywords: Centers of Responsibility, Estimated Budgets, the control, Evaluation of performance, Report of the performance, Responsibility Accounting.