The role of management accounting practices in operational risk management: the case of Palestinian commercial banks

Hind Muhtaseb and Derar Eleyan

Abstract

This paper follows an exploratory, descriptive approach to investigate the role that management accounting practices plays in managing operational risks in the Palestinian commercial banking sector. To gather data, a questionnaire was mailed to 78 risk management, internal auditing and finance Palestinian-bank employees, and the response rate was 100%. Six post-survey interviews were also conducted with six Palestinian banking professionals to gain further insights about the findings. Using descriptive statistics and mean scores, the results indicate that financial-statement analysis, product profitability analysis and total quality management are the management accounting practices perceived to be most related to operational risk management in the banking sector. The results also show that management accounting practices are perceived to be most related to monitoring operational risks and reporting findings to management.