Question

In responsibility accounting, why are reports to higher-level managers usually summarized?

In responsibility accounting, why are reports to higher-level managers usually summarized?

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Answer #1

Responsibility accounting:-An accounting systems which collects,summarises and report the accounting record relating to individual managers. Executive and upper level management use this report to track the efficiency and profitability by department and manager.

Reports to higher level managers are summarised because Lower level managers are more responsible for detailed cost reports.Excessively detailed reports tend to unknown broader issues which are faced by higher-level mangers, thus reports tend to be summarized and contain only relevant information on costs.

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