Management Control in Major Brazilian Multiple Banks: the Impact of Internationalization and Convergence of Accounting Standards on the Control Systems

• Main Authors: João Carlos Damasceno Reis, Josir Simeone Gomes, Marta Dalbem
• Format: Article
• Language: Portuguese
• Published: Universidade Federal do Rio de Janeiro 2014-08-01
• Series: Revista Sociedade, Contabilidade e Gestão
• Subjects: Management Control; Banks; Internationalization
• Online Access: http://www.atena.org.br/revista/ojs-2.2.3-06/index.php/ufrj/article/viewFile/2256/1962

This study verifies the impact caused by the processes of globalization and convergence to international accounting standards on the managerial control systems of the largest multiple banks that operate in Brazil. The study was exploratory in nature, with the use of the case study method and the application of questionnaires containing mostly open questions to upper tier executives of four major Brazilian banks. The analysis showed that globalization has resulted in improved control systems and widespread use of information technology. It was also found that the convergence to international accounting standards occurred properly, thanks to the steps taken by the Central Bank that aimed at an agile updating of the Brazilian accounting standards laid down for banks operating in Brazil, in line with international standards. In general, the researched banks did not report a significant impact of convergence to the IFRS on their management control systems; adherence to the international accounting standards has had more significant impacts on information systems, especially regarding the new reporting and transparency standards, rather than on management controls. This result signals that the management control systems of the four banks in the sample are in line with Anthony (1965)’s vision, that is, that flexibility to adapt to every change in the external environment might actually increase risks of failure.