The master budget is often used as a basis for the development of computer based financial planning models. Such analysis is often called sensitivity analysis or what-if analysis . Responsibility Accounting Larger organisations create responsibility centres, whereby management are given certain powers. Performance Reporting responsibility accounting emphasises the responsibility delegated to lower level management and the need to only report items that deserve attention. Feedback on Performance Feedback identified in the performance report should be interpreted carefully.
Variances identify differences.
Underlying reasons for these differences should be sought and appropriate action taken. In theory managers should only be responsible for controllable costs and revenues. Uncontrollable items should be either segregated or omitted from the performance report. Difficulties in Identifying Controllability. Sometimes uncontrollable items may be placed within a particular manager s responsibility.