Stephanie\'s responsibility report includes the salary and benefits of her secre

Question

Stephanie's responsibility report includes the salary and benefits of her secretary. Although Stephanie prepares a performance evaluation for the secretary each year, Stephanie's superior determines how much the secretary will be paid. This example is an illustration of the fact that: Multiple Choice

1. Responsibility reporting systems are not perfect.

2. Managers sometimes are held responsible for items over which they have only limited control.

3. Control may be shared.

4. All of these are correct answers.

Explanation / Answer

Solution: Responsibility reporting systems are not perfect

Explanation: The Responsibility reporting system also known as pyramid structure for responsibility accounting is based on the assumption that every cost incurred need to be the responsibility of one person somewhere in the company. With this approach, cost reports can be tailored for each recipient; and it is not been followed in this scenario

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