Benefits of Responsibility Accounting

Topics: Management, Organization, Strategic management Pages: 2 (395 words) Published: May 19, 2013
1) Better System of Control
It enables the management to management to delegate authority to responsibility centres while remaining overall control with itself. 2) Decentralization of Decision Making
It forces the management to consider the organisational structure to result in effective delegation of authority and placement of responsibility.So it will compel individual manager to take right decision. 3) Comparison of Performance

It encourages the comparison between Actual Achievements with Budgeted figures.It compels the setting of realistic goal. 4) Increases the interest of staff
It increases the interest of supervisory staff as they are answerable about  deviations of  responsibility centers which they are responsible. 5) Simplifies the structure of reports and facilitates the prompt reporting  Because of exclusion of those items which are beyond the scope of individual responsibility.


1) Better System of Control
It enables the management to management to delegate authority to responsibility centres while remaining overall control with itself. For the purpose of exercising best managerial control over the affairs of the organization & achieving the desired goal, responsibility accounting system & budgetary control system can work together.

2) Comparison of Performance
It encourages the comparison between Actual Achievements with Budgeted figures. It compels the setting of realistic goal. As realistic goals are fixed for a responsibility centre, its achievement by the employees becomes easy. Their contribution can be assessed by themselves for the purpose of achieving the goal of the organization as a whole. A sense of belonging to the organization is created among the employees by the systematic responsibility accounting as the reward of the employees for accomplishment is not unsatisfactory

3) Decentralization of Decision Making
It forces the...
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