Responsibility Accounting

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12
Chapter Twelve

• Responsibility Accounting

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Responsibility Accounting Background

• Responsibility accounting integrates accounting
  financial reporting with management and lines of
  authority responsibility
• Often this is not the case

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Responsibility Accounting Definition

• Responsibility accounting is an acctg financial
  reporting system designed to
• To plan measure financial goals actual
  results
• Through designated responsibility centers
• Within the overall goals of the organization

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Responsibility Centers

• A subunit in an organization whose manager is
  held accountable for specified financial results.

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Responsibility Centers

• Cost Center.
• Revenue Center
• Profit Center
• Investment Center

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PERFORMANCE REPORTS
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COST ALLOCATION
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Segmented Reporting

• A business segment
• is any business unit of an organization of
  similar activities or product lines, etc of
  grouped revenue, cost, profit data.
• Also part of SEC required reporting

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SEGMENTED INCOME STATEMENTS
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Total Quality Management
Design
Grade
Conformance
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Six Sigma

• Operational process using statistical analysis to
  measure and improve operations
• Identifies defects in processes
• Some similarities to TQM Lean, Kaizen, but
  differs in depth and philosophy
• Championed by GE and Jack Welch.

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ISO 9000 Standards

• European developed standards 1987
• Being adopted in US
• Rigorous requirements to qualify
• Managerial acctg implications
• Requires documentation of quality control system
• Requires measurement of costs benefits of
  quality control system