MANAGEMENT ACCOUNTING SYSTEMS, CREDIT RISK MANAGEMENT PRACTICES AND ORGANIZATIONAL PERFORMANCE AT COMMERCIAL BANKING SECTOR IN PALESTINE

Abstract

The aim of this paper is to report the results of a study on the linkages between credit risk management practices and management accounting system (MAS) towards organizational performance through testing the match and joint effects of MAS and CRM on organizational performance. The research method involved administering a questionnaire to 11 commercial banks listed on the Palestinian Monetary Authority website and the respondents were those in the risk management department on banks such as chief executive officers (CEOs), chief risk officers (CROs), chief financial controllers, general managers, risk managers, and bank employees at departments related to risk management in Palestinian commercial banks. Based on the IFAC’s (1998) framework and the Bank of International Settlement report (2013), it was found that most of the Palestinian commercial banks have a complete implementation for ERM framework. In light if the relationship between CRM practices and MAS some management accounting practices works to assist in managing credit risks in two main dimensions costing system and budgeting. The finding also confirms the important role of interaction between CRM and the use of costing system MAS towards organizational performance.