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Essay / Research Paper Abstract
This 5 page paper examines the idea of responsibility accounting looking at the underlying concepts, the use of responsibility centres and the associated advantages and disadvantages of the responsibility accounting system. The bibliography cites two sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TErespona.rtf
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Unformatted sample text from the term paper:
accounting is based on the idea that large organisations can be difficult to manage as a singular entity, in order for management to be effective the organisation needs to be
separated into individual, manageable parts which are decentralised. The use of responsibility accounting is as a method of cost control, the implication is that cost control equal better management and
that the responsibility to control costs for an organisation rests with the management (McNair and Carr, 1994). The approach may be argued as old-fashioned, based on power bases and the
use of strict budgets and a bureaucratic organisational structure, with the inability to adapt to modern methods of management and new techniques (McNair and Carr, 1994). However, it may also
be argued that responsibility accounting is a system which allows for the control and management of accounting in a large organisation where any of the alternatives systems would not allow
the same level of control management over the accounts and budgets (Frederickson and Waller, 2005). In order to consider the advantages and disadvantages of response pretty accounting it is
necessary to outline the way in which it operates. A traditional approach to responsibility accounting is the use of responsibility centres which can be used as ways to measure the
way that the company is performing. The traditional responsibility centres include revenue centres, cost centres, profit centres and investment centres. By dividing the company into different centres the theory
is that the individual segment managers will be able to have responsibility for the way in which they meet their targets and budgets, and will be able to influence the
outcome is using responsibility accounting. A revenue centre is a segment of the company whose main output is the generation of revenue, with
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