Responsibility accounting is a system of reporting financial results based on managerial
responsibilities within an organization. This report can evaluate performance and
highlight the results that can be directly controlled by the manager or unit evaluated. In
short, if something falls short or is mishandled that responsibility can be traced to a
specific department or unit. That manager will be accountable and answer for it.
I see responsibility accounting in the brokerage that I am associated with. There are
several units (departments) that make up the entire brokerage. For example, the property
management unit breaks down to a leasing agent, who is responsible for rent payments,
lease renewals and expirations and move outs. While the maintenance coordinator is
responsible for work orders, vendor invoices, billing the correct property. Those cost are
separated by service: A/C maintenance and repair, plumbing, electrical. There is a
hierarchy to this method. b Each vendor (service) is accounted for by the maintenance
coordinator. Total expenses given to the leasing agent for her report (which shows as a
single line item from maintenance). The leasing agent report is given to the Property
Manager and then to the Broker. Certain reports are done monthly others are done
quarterly. There is also a system in place for the sales and listing department.
These reports are in place to track cost and compare the actual to the budgeted based on
last year's numbers. b One can assess the performance of all units in a glance, whether in
terms of revenue or cost.
Romney, M. B., Steinbart, P. J., Summers, S. L., & Wood, D. A. (2020). Accounting
Information Systems (15th ed.). Pearson Education (US
