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Responsibility Centers

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Provide a brief explanation of types of responsibility centres and how to determine what type of responsibility centre a department should be?

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Let us first of all understand the concept of the responsibility center as in the question four types of responsibility centers is used. Use of responsibility centers is one of the most established and widely used techniques in financial control. Responsibility accounting breaks a large organization into smaller, more easily manageable units known as responsibility centers. Each unit is looked upon as a small business. Managers bear an element of responsibility for the performance of their respective centers.

The principle of controllability applies to responsibility accounting. The presumption underlying controllability is that every dollar earned or dollar spent is under the control of, and can be traced to, at least one manager.

Responsibility accounting represents decentralization of a business enterprise. ...

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This explains the concept of Responsibility Centers with examples

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Responsibility centers within a Law Firm

You have been asked to speak about the topic of responsibility centers to a group of executives at a conference. Briefly describe three examples of responsibility centers with in a Law Firm.

Describe how the responsibility centers interact.

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