Abstract

Today’s businesses are more competitive than ever before, and they must constantly adapt to changing market conditions and altering business environments. If the responsibility or subunits departments where an individual accountants is held personally responsible for their operations are unable to work together effectivel can result in failure to achieve organizations financial goals and objectives. Effective operations throughout an organization, and can be easily controlled by allocating responsibilities and also power with regard to the structure and size of the firm, is critical to the achievement of organizational goals. It is possible to reduce costs and increase profits by using responsibility accounting while preparing tax returns or financial statements, but it is also possible to use responsibility accounting to aid in the analysis of performance. It is possible to eliminate ethical issues from company operations at all levels with the proper implementation of responsibility accounting. In this study, I will look at how the legal obligations of accountants in taxation and financial reporting within an organization. Impacts of responsibility accounting on business organizations relating to mistakes of taxes and financial statements are studied using a descriptive approach based on a wide range of literature.

Introduction

Delegation of power and responsibility is at the heart of responsibility accounting system in every organization. Accountancy of the responsibility department is given power and duty. The system regarding responsibility legal system of accountant is based on responsibility groups (i.e., revenue department, investment department, profit department and cost c department). The Investment department are run by a team of accountants who are in charge of overseeing all aspects of income, tax obligations, expenses, and capital expenditures.

The revenue department accountant is in charge of a company’s operational revenue. There is no control over revenue or operational asset investment in the cost department accountant’s hands (Shahidehpour, 2021). However, the profit department accountant does not influence operational asset investment. To assess the effectiveness of each responsibility department’s accountants and to provide a responsibility report and an information report for upper management review, responsibility accounting was created to that end (Kilian & Hennigs, 2014). Each responsibility department’s results are measured in this way, allowing each accountant to be aware of his or her responsibilities in terms of cost, revenue, taxes and profit, and budgetary management. Effective in cost control, management control, and profit planning is the key legal responsibility of every accountant in an organization. Consequently, like an accounting system, it divided costs between those that could be controlled and those that could not be controlled (DESYATNYK & SHAPOVALOV, 2020).

Only the financial costs that can be controlled are considered in this method. Controlling expenses and errors regarding taxes or financial statements are a part of the responsibility legal system of control. As a performance evaluation tool, it may also be used to divide the organizational accounting structure into distinct responsibility areas. Accountability accounting which is based on the notion of establishing decentralization (segmentation of organizations into subunits and delegation of decision-making power), motivating employees and evaluating performance Guterresa et al., (2020). One of the finest instruments for accounting cost evaluation and management in the event of decentralization or divisionalization is responsibility legal accounting, which makes managing a huge business or organization much easier.

Responsibility Accounting Relation to Taxes or Financial Statements

Responsibility accounting, on the other hand, which entails the division of an organization into smaller, more manageable parts, each with its own set of accounting tasks. Departments, divisions, branches, segments, and product lines are examples of these units. There are a variety of roles and responsibilities assigned to each department’s accountants. Responsibility legal accounting is a method in which accountants are held accountable for financial errors or mistakes , and their actual performance may be measured and evaluated (Lennon, 2019). Other names for this kind of accounting include “activity” and “profitability”.

activity accounting or Accountability accounting, is the collecting as well as reporting of financial information regarding different financial decision departments, taxes, and financial statements in an organization. Accountants should only be held accountable for the things the