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Responsibility accounting is a system of control where responsibility is assigned for the control of costs. The persons are made responsible for the control of costs. Proper authority is given to the persons so that they are able to keep up their performance. In case the performance is not according to the predetermined standards then the persons who are assigned this duty will be personally responsible for it. In responsibility accounting the emphasis is on men rather than on systems, it accounting focuses main attention on responsibility centers.A responsibility center is a specific unit of an organization assigned to a manager who is held responsible for its operations and resources. Examples:
Cost or Expense Center, Profit Center, Investment Center, Revenue Center, Contribution Center
Thanks for sharing the information. Agreed it is the responsibility of Financial and Admin / procurement controls dept to effectively controls the budgetary expenses.
1- record events & transactions
2- analyze data to be available in good appearance for decision makers to use it in its understanding for business
3-report financial position for CO , its profits & loss
AGREE WITH Mir Mujtaba Ali Internal Audit Manager
BUT I LIKE TO ADD FOLLOWING INFORMATION
cost center is measure using efficiency measurement
revenue center is measure using effectively measurement
profit center is measure using ROA ratio
Each one who have a role for accounting and each department who is spending and earning money.
Well explained by Mr. Mir and other experts.
An accounting system that collects, summarizes, and reports accounting data relating to the responsibilities of individual managers.
There are three types of responsibility centers:
(1) expense (or cost) center.
(2) profit center.
(3) investment center.
Agreed with the answers............................................................
Agreed with the answer Mir Mujtaba Ali
Responsibility accounting is an underlying concept of accounting performance measurement systems. The basic idea is that large diversified organizations are difficult, if not impossible to manage as a single segment, thus they must be decentralized or separated into manageable parts. These parts, or segments are referred to as responsibility centers that include:1) revenue centers,2) cost centers,3) profit centers and4) investment centers. This approach allows responsibility to be assigned to the segment managers that have the greatest amount of influence over the key elements to be managed. These elements include revenue for a revenue center (a segment that mainly generates revenue with relatively little costs), costs for a cost center (a segment that generates costs, but no revenue), a measure of profitability for a profit center (a segment that generates both revenue and costs) and return on investment (ROI) for an investment center (a segment such as a division of a company where the manager controls the acquisition and utilization of assets, as well as revenue and costs)
Agree with all qolleagues ,,,,,,,,,,,
