Responsible Accounting

Responsible Accounting

1. Identify at least two behavioral that could arise

There are two potential behavior advantages if manager accepts and participate in the responsibility accounting system and participatory budgeting system. Responsibility accounting is used to measure the performance of people and department to foster goal congruence whereas, participatory budgeting system is a budgeting process under which those people impacted by a budget are actively involved in the budget creation process.

When BSC’S manager is likely to accept the system and be motivated to attain the budget target, they were actively involved in setting the goals and know what is expected of them. It would be motivate them to plan ahead and promote goal congruence. Besides that, manager would be pleased to be responsible only for those items they can control because they have certain objective to be achieved. Furthermore, communication and group cohesiveness would be improved because managers would feel part of a team due to participate in both planning and implementation system that are to be adopted

2. Identify at least two potential problems that could arise

Responsible Accounting System

In BSC responsible accounting system, the two potential problems that might be arise if the manager did not accept the changes in the philosophy. First they will be a problem if they could not resent in being measured on an individual basis rather than the new system. They may have responsible for costs over which they have no control on it. So the manager must understand the new responsibilities in new culture of management and how they must operates and gives cooperation on it.

If the manager did not accept the changes, they might face with the high focus on their own departments goal and this will contribute to the lack of communication between departments and to the company performance.

Participating Budgeting System

Participating budgeting system encouraged the manager to be...