Application Of Activity-based Costing In A Securities Company Investment Banking Department

Activity based costing,which takes operation cost as object, as well as focus on completion of each activity and consumption of resources, is a cost accounting method, providing information related to cost control as required effectively. At present, China’s most security companies are still in their traditional cost management mode, There are problems such as cost accounting system lag, no analysis of the job application process to cost management and lack of awareness in cost control. With the rise of internet securities, investment banking are facing increasingly fierce competition in the industry. On their innovative way of running mode transformation, investment banks is in urgent need to strengthen their management mechanism and improve its core competitiveness, in order to remain invincible in the financial market.Focusing on the shortcomings of A security company investment banking department current cost accounting method, this paper presents the necessity and feasibility of activity based cost management in the implementation of investment banking department with activity based costing theory.Combined with investment banking business, it puts forward the investment banking department plan and steps of the ABC model implementation, which starts from investment project business process analysis, then to activities definition, costs allocation, cost drivers confirmation, and finally the allocation of the total cost to departments/products, establishing a complete cost accounting model.The paper,which proposes applications of activity-based costing method in securities companies and its investment banking department, will contribute to refine the cost accounting of securities companies to strengthen customer relationship management, and improve the commission pricing method and performance evaluation method, at the same time, it’s kind of enrichment and development to the cost of operating the theory itself...