What does responsibility accounting primarily focus on?

Responsibility accounting primarily focuses on the segmentation of financial information by manager responsibilities. This approach allows an organization to evaluate the performance of individual departments or managers based on their direct control over revenues and expenses. By assigning specific financial data to different areas of the organization, responsibility accounting enables management to assess how well each segment performs, fostering accountability and encouraging managers to take ownership of their financial results. This segmentation also aids in identifying successful practices and areas needing improvement, ultimately guiding strategic decisions within the company.

In contrast, maximizing overall company efficiency might encompass various broader strategies unrelated to individual managerial performance. Compiling company-wide financial statements, while essential, does not provide insights into individual responsibility or performance. Tax reporting for business units deals specifically with compliance and tax obligations rather than the performance measurement focus of responsibility accounting.