Chapter 9_blackboard - CHAPTER 9 9-1 Chapter Overview...

CHAPTER 9
9-1

Chapter Overview
Responsibility Accounting
• Decentralization
• Responsibility Centers
Performance Measurement
• Return on Investment
• Residual Income
• Balanced Scorecard
Responsibility Reports
• Guidelines
• Management by Exception
• Controllability

An accounting system that
provides information . . .
Responsibility Accounting
Relating to the
responsibilities of
individual managers.
To evaluate
managers on
controllable items.
Accounting as the Language
of Business

Decision Making is Pushed Down
Supervisor Supervisor
Middle
Management
Supervisor Supervisor
Middle
Management
Top
Management
Decentralization often occurs as
organizations continue to grow.
Responsibility Accounting
Decentralization
The delegation of freedom to make decisions
is called decentralization
Continuum

Improves quality
of decisions
Encourages upper-level management to
concentrate on strategic decisions
Improves
productivity
Develops
lower-level
managers
Improves
performance
evaluation
Advantages
Responsibility Accounting
Decentralization

Successful implementation of responsibility
accounting depends on clear lines of authority
and clearly defined levels of responsibility.
Vice President
of Finance
Department Manager
Store Manager
Vice President
of Operations
Vice President
of Marketing
President
Board of Directors
Responsibility Accounting