Factors affecting responsibility accounting at joint stock commercial banks in vietnam

西南交通大学学报 第 55 卷第 期 2020 年 月 Vol 55 No JOURNAL OF SOUTHWEST JIAOTONG UNIVERSITY Apr 2020 ISSN: 0258-2724 DOI：10.35741/issn.0258-2724.54.6.20 Research Article Finance and Accounting FACTORS AFFECTING RESPONSIBILITY ACCOUNTING AT JOINT STOCK COMMERCIAL BANKS IN VIETNAM Nguyen Thi Diena, Le Doan Minh Ducb, Vo Hoang Ngoc Thuyc, Nguyen Hoang Tiend,*, Nguyen Date, a Thu Dau Mot University, Vietnam, diennt@tdmu.edu.vn b Thu Dau Mot University, Vietnam, ledoanminhduc@gmail.com c Thu Dau Mot University, Vietnam, vonhthuy@gmail.com d Corresponding author, Saigon International University, Vietnam, vietnameu@gmail.com e Ho Chi Minh City University of Law, Vietnam, Abstract Modern management requires today corporations to control and evaluate governance responsibilities at each organizational level of To achieve this goal, managers must possess management tools to it effectively In order to improve the operational efficiency of joint stock commercial banks (JSBs), it is necessary to include responsibility accounting (RA) as one of such tools This study conducted a survey of 32 JSBs with 304 questionnaires, using SPSS software for data analysis The obtained research results indicate that factors affecting RA in JSBs banks include: (1) decentralized management; (2) organizational structure; (3) managerial awareness; (4) controlling activities; (5) qualifications of accountants; (6) reward systems Based on the obtained research results, we proposed several governance implications for JSBs such as: (1) choosing suitable organizational structure (2) developing RA’s reporting system, (3) improving professional qualifications and management capacity Keywords: Influence factors, responsibility accounting, joint stock commercial banks 摘要 关键词: I INTRODUCTION Management activities are crucial for all companies regardless of their field of operation, size and scale [32, 33, 34] Managers must plan, organize, lead and control company resources, including both tangible and intangible assets in a way that determined goals are effectively achieved [5, 6, 17, 35] The development of accounting is always associated with the increased organizational demand for calculating and assessing economic results achieved by management staff Moreover, difficulties in management assessment are conditions to pay more attention to accounting [25] In this context, manager should choose right management tool which would be the most effective [29, 31] There are reasons to implement the responsibility accounting (RA) system [3]: (i) decentralization; (ii) assessment of the results; (iii) motivation; (iv) transfer pricing; (v) decision on whether to abort or continue the business The important thing is how joint stock banks (JSBs) implement RA tool into the banking management processes for achieving higher efficiency in accordance with their characteristic features and conditions Thus, in this context, accountants are responsible for providing special management information which should be understood as a collection, classification, aggregation, analysis and presentation of financial and non-financial information that support managers in decision making and controling [26] 2 Tien et al / Journal of Southwest Jiaotong University/ Vol 55 No Apr 2020 II LITERATURE REVIEW RA in management in general and in accounting in particular is a hotly debated topic among academics and administrators across the globe RA was first established and developed strongly in 1950 among large manufacturing enterprises in the US [16] such as IBM, GM, Ford Motor, Kodak, etc The role of RA then is to provide useful information for making management decision through quantitative methods and techniques RA is very important in providing accountability information for each individual, department, and management level in organization through management reports divided usually into two types: responsibility statements, financial and non-financial information reports [20] RA enables reliable evaluation of divisions and departments’ performance and results; guarantees the independence of each organizational unit [2] RA can find causal relationships between activities and their effectiveness RA can also evaluate and compare the effectiveness of divisions and departments within decentralized organizations [37] Decentralization varies according to the size and scale of organization Usually, large organizations use accountability systems based on activities, functions and strategies [4] The RA system could be considered under: (i) the structural organization approach (management decentralization) and (ii) the content approach [36] In the first approach, the RA system is divided into multiple responsibility centers Accordingly, in European countries and India, the organization of RA system in companies includes three responsibility centers: investment centers, profit centers and cost centers [20] As pointed out by previous studies in USA, the organization model of large private companies includes four responsibility centers: investment centers, profit centers, cost centers and revenue centers [10] To complement the above studies, according to Horngren et al [15], private sector includes five following responsibility centers: cost center, revenue center, profit center, investment center and contribution margin center In the second approach, RA content includes elements: assignment of responsibilities; development of standards and measure results; evaluation of achievements; distribution of results [14] and further developed into different factors [11] This shows that RA is also an innovation of accounting system [3] Therefore, the study of RA application that could be suitable for all types of businesses is being extensively conducted in the current period For example, Fowzia (2011) used RA to measure the performance of service organizations [9] Hanini (2013) used RA to measure the level of organizational performance in banks and in other joint stock companies [13] Some other research examples are: the model of RA systems in industrial joint stock companies [19], the model of factors affecting the RA application for manufacturing enterprises, in particular, factors affecting RA application in food processing enterprises, the influence of RA on strategy implementation to boost the organization's effectiveness and the application of RA in sustainable development of manufacturing enterprises [21] Through the review of the literature, we have found that RA is an effective governance tool to execute control over both financial and strategic aspect of the organization Therefore, from administrative and governance perspective, it is necessary to conduct research and apply the RA tool for management purpose regardless of the type of enterprise The problem is to increase the extent to which each business can access and exploit this management tool, the appropriatenes of this tool up to the characteristics of business and, finally, the necessity to conduct related research and measure the impact of RA on business performance III RESEARCH METHODS 3.1 Preliminary research This is done through qualitative methods to adjust and supplement the observed variables used in the measurement of our interested research concepts The research process in this stage can be classified into the following three types of research: exploratory research, descriptive research and explanatory research Exploratory research is designed to allow researchers to discover a certain phenomenon This type of research is conducted when the field of study is too large or when the research problem is difficult to limit Descriptive research is conclusive in nature, as opposed to exploratory This means that descriptive research gathers quantifiable information that can be used for statistical inference on target audience through data analysis As a consequence, this type of research takes the form of closed-ended questions, which limits its ability to provide unique insights However, used properly it can help better define and measure the significance of something about a group of respondents and the population they represent Explanatory research is conducted in order to help us find the problem that was not studied before indepth Explanatory research is not used to give us some conclusive evidence but help us in understanding problem more efficiently Exploratory researchers should be able to adapt to the new data and the new insight that they discover as they study the subject In this article, authors will carry out exploratory research with the two main objectives as follows: (i) To identify and select factors that affect the RA in JSBs in Vietnam Those factors are necessary to carry out the next research; (ii) To explore the reactions, attitudes and comments of the banking management staff on questions surrounding bank management issues and the implementation of RA in JSBs in Vietnam to get some adjustments and to complete the research scales before starting formal research 3.2 Formal research The survey sample is taken from the board of directors, the heads/deputy heads of the department, the control section, the internal audit department, the chief accountant and the accountants of JSBs in Vietnam Each survey method, e-survey or traditional postal survey, has certain advantages and limitations, so as researchers, we flexibly use the survey method depending on the actual situation E-surveys have the advantage associated with lower cost per respondent [22] Secondly, for survey respondents, e-surveys can reduce the total time required to answer the survey questions, because they not need extra time to send feedback [8] However, esurveys also have some limitations as respondents may encounter technical difficulties in receiving, opening, and completing e-surveys questionnaires or simply the large number of refusal due to outdated or inaccurate email addresses that may at least be equivalent to the surveys sent by traditional post mail [7] Email invitations and reminders can also be considered as spams [1, 24] Other studies suggest that e-surveys response rate is lower than that of postal surveys [18, 23] Therefore, in this study, it is possible to obtain objective answers, using mix method, in accordance with actual conditions In terms of sampling method, we traditionally use convenient sampling method The data collection process is conducted by direct surveys on spot, by sending questionnaires via email or postal mail The obtained data is then synthesized by excel software and cleaned, coded and processed by SPSS 22 software Time period for distributing and collecting surveys questionnaire is from 2019 August to Independent variable scale I Influence factor Encode Managerial decentralization 2019 October We collected surveys questionnaires from 32 JSBs spreading from the North to the South, across Vietnam Most of them are located in the largest megacity: the Hanoi capital and the Ho Chi Minh City (HCMC) All observed variables in the questionnaire (component of the scale) use the 5-grade Likert scale including: (1) Strongly disagree; (2) Disagree, (3) No comments; (4) Agree; (5) Strongly agree Samples were taken according to the recommendation rules of Comrey & Lee (1992) with a minimum sample size of 300 The research team distributed 350 collected questionnaires, and we obtained in return 310 questionnaires in which are invalid The remaining questionnaires are valid and are more than 300 samples They were used for the purpose of research Thus, the number of observations of the sample is 304, satisfying the sample size condition Samples were selected by convenient method Subjects participating in the study were mainly female (63.5%) with age between 22 and 35 (86.2%) and mostly with university degree (56.6%) General information about the participants in the survey are shown in Table below: Table Survey sample statistics Freque Percent FrequePercent ncy ncy Gender 304 100 30 100 Qualification Male 111 36.5 Colleges 98 32.2 Female 193 63.5 University Postgraduate Age 304 100 22-25 26-35 139 123 45.7 40.5 36-45 31 10.2 over 45 11 3.6 Position Director Head/Deputy Head 17 34 30 21 89 56.6 11.2 100 6.9 29.3 13 43.1 Accountant 63 20.7 (Source: Data processing results) Team Leader In this study, we inherited from the research of Hanini (2013) and Tuan (2017) to conduct analysis of the impact factors affecting the RA in JSBs in Vietnam [13, 36] So, independent variables and dependent variables are presented suitably in the following Table and Table Table 4 Tien et al / Journal of Southwest Jiaotong University/ Vol 55 No Apr 2020 Managers sharing specific tasks Managers promulgating authority to make decisions of the centers they manage Managers are with clearly described and defined responsibilities and authority Qualified staff with appropriate expertise Managers having the right time to carry out their work II III IV V VI PQQL1 PQQL2 PQQL3 PQQL4 PQQL5 Accountability of employees PQQL6 Managers responsible for reporting the performance of PQQL7 their centers Organizational structure Organizational structure is with responsibility centers with their CCTC1 own type of activities Collaborative relationship between the responsibility CCTC2 centers There is a responsible center CCTC3 manager Each responsibility center has specific and clearly described CCTC4 activities Awareness of managers Managers are informed about NTNQL1 the RA system Managers are responsible for NTNQL2 the RA system Managers are aware of the NTNQL3 benefits of RA Managers appreciate the usefulness of RA technical NTNQL4 tools Control Internal control is organized KS1 regularly The process of controlling KS2 business activities is clearly organized External audits are carried out KS3 periodically Risk control procedures are set KS4 up fully, meeting requirements Internal audit is organized independently from other KS5 departments Accounting staff qualifications Accounting staff with college TDNVKT1 degrees Accounting staff with bachelor TDNVKT2 degree Accounting staff with TDNVKT3 postgraduate qualifications Accountants with domestic certificates of professional and TDNVKT4 internationally accreditation (ACCA, CMA, and so on) Reward system Financial and non-financial HTKT1 rewards are supplemented Periodic review of the reward HTKT2 system Rewards based on objective criteria and in accordance with HTKT3 responsibilities Employees are satisfied with the reward system, which increases the work efficiency HTKT4 (Source: Summary of the research team) Table Dependent variable scale Influence factor Encode The ability to organize and implement RA in JSBs in Vietnam The ability to organize decentralized KNTCXD1 management in RA Ability to organize and build KNTCXD2 responsibility centers in RA Ability to set targets to assess the KNTCXD3 performance of responsible centers Ability to report on performance KNTCXD4 assessment of responsible centers (Source: Summary of the research team) Bartlett's Test of Sphericity 4.2 Results of Correlation Analysis (CA) The analysis results in Table show that the correlation coefficient between the independent variables and the dependent variables and between independent variables positively indicates a positive relationship in which the strongest correlation is between the control variable and the organizational structure variable (0.491; 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