Advantages and disadvantages of responsibility accounting
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Answer:
Each and every individual in the organisation is assigned some responsibility and they are accountable for their work. Everybody knows what is expected of him. The responsibility can easily be identified and satisfactory and unsatisfactory performances of various persons are known. Nobody can shift responsibility to anybody else if something goes wrong. So, under this system responsibility is assigned individually.
The implementation cost of social responsibility accounting is high. It requires a high labor workload, especially at the initial stage of its implementation. Early planning and troubleshooting strategies have to be organized, which could incur massive time and cost to the business. The management has to implement long-term, strategic planning so that the accounting system meets the organization’s profitability objectives while also minimizing the social impact of its activities. Risk awareness as a result of the implementation has to be taken into consideration and monitored.