A longitudinal case study of profitability reporting in a bank

Christine Helliar, Ian Cobb, John Innes

    Research output: Contribution to journalArticle

    15 Citations (Scopus)

    Abstract

    This project involved a seven-year longitudinal case study of a Bank monitoring over time the changes in profit measurement and overhead allocation, product group profitability, benchmarking, customer profitability, budgeting and profitability/performance measures such as return on risk adjusted capital. The overall finding is that the Bank’s profitability reporting (particularly its product group and customer profitability) changed considerably during this seven-year period. The main factors that accountants and managers identified as influencing such changes were four external factors and two internal factors. The four external factors were changes in technology (computers and telecommunications), regulatory change, increasingly competitive global markets and a greater difficulty in attracting customers. The two internal factors were the development of new products leading to a wider product range and a changing management accounting culture. The historical and organizational context of the Bank was also critical in this process of change, and a dynamic contingency model is proposed. This longitudinal case study indicates that more changes are occurring in management accounting practices (such as profitability reporting) than the current evidence from questionnaire surveys and ‘snapshot’ case studies reveals. An area for future research that this study highlights is that although accountants and managers talk in terms of long-term planning and control, the norm is short-term management accounting solutions and managerial reaction to new external developments.
    Original languageEnglish
    Pages (from-to)27-53
    Number of pages27
    JournalBritish Accounting Review
    Volume34
    Issue number1
    DOIs
    Publication statusPublished - 2002

    Fingerprint

    Profitability
    Longitudinal case study
    Managers
    Accountants
    Internal factors
    Management accounting
    External factors
    Customer profitability
    Bank monitoring
    Global market
    Planning and control
    Profit
    Telecommunications
    Regulatory change
    Questionnaire survey
    Contingency model
    Organizational context
    Management accounting practice
    Bank profitability
    Computer technology

    Keywords

    • Banks
    • Profitability analysis
    • Profit measurement
    • Banking

    Cite this

    Helliar, Christine ; Cobb, Ian ; Innes, John. / A longitudinal case study of profitability reporting in a bank. In: British Accounting Review. 2002 ; Vol. 34, No. 1. pp. 27-53.
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    A longitudinal case study of profitability reporting in a bank. / Helliar, Christine; Cobb, Ian; Innes, John.

    In: British Accounting Review, Vol. 34, No. 1, 2002, p. 27-53.

    Research output: Contribution to journalArticle

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