ABSTRACT
This chapter focuses on responsibility accounting and budgeting. The underlying theme of these two topics is organizational control. Responsibility accounting involves sub-dividing an organization into units of accountability. It is fundamental to control as it involves holding managers accountable for the performance of their respective units. Closely associated with responsibility accounting is budgeting. This is because budgeting involves allocating resources to an organization’s sub-units. In addition, the budget highlights benchmarks that are used when appraising a unit manager’s performance.
