Decentralization and responsibility accounting are re¬ lated in that decentralization

• is made to work effectively though the use of re¬ sponsibility accounting which provides informa¬ tion about the performance, efficiency, and effectiveness of organizational responsibility cen¬ ters and their managers.

• implies the acceptance of authority by subordi¬ nate managers and responsibility reports indicate the “rolling up” of that authority back to upper management.

• requires each responsibility center to report on the activities under its manager’s immediate con¬ trol.

• uses the principle of management by exception, which is reflected in the successively aggregated responsibility reports.

• seeks goal congruence and responsibility reports to help to highlight any suboptimization of re¬ sources. LO.1