According to ACCA study, accountants can help organizations prepare for future shocks by creating a more resilient risk culture.
Risk management as we knew it has been discredited by the pandemic. Although COVID-19 is the biggest crisis of the last generation, business and society also face enormous risks associated with rapid climate change – perhaps the greatest risk of all. Therefore, risk management, as never before, comes to the fore. This is stated in the study “Rethinking Risk for the Future”, conducted by ACCA. Survey participants are ACCA members, risk professionals from various financial fields.
Today, accountancy profession has a unique opportunity to increase its value in the world after the pandemic, where a huge number of urgent environmental, social and economic risks prevail.
Key areas of risk management for accountants
• New opportunities. The pandemic has raised the urgency of issues related to climate change, social inequality and shareholders-first mentality. The role of corporate reporting for doing business in the new environment has also changed. Accountants play a key role in this transformation.
• Looking to the future of risks (ERM). The role of accountants in effective risk management goes beyond reporting abount the past. It involves using the information to plan for the future. By being accountable, accountants can provide a deeper analysis of different scenarios and optimize predictive analytics.
• Risk management. Accountants understand business models and how best to organize processes that help companies achieve their objectives. However, they can also make a greater contribution to supporting the board of directors and senior management in terms of the diverse and changing needs of stakeholders, as well as building the necessary trust.
• Operational resiliency. Accountants have the opportunity to reveal value beyond the financial, operational and systemic risks that have prevailed since the global financial crisis (GFC). This will give an opportunity to provide analytics on the uncertainty of the internal and external environment and their effect on business.
• Flexibility in approaches. Every industry has its own risks. However, the seriousness of some of the consequences cannot be underestimated. For example, the lack of visibility in supply chains. Accountants need to measure not so easy to quantify risks and provide more information needed to plan and prepare strategies.
Helen Brand, ACCA’s chief executive, said: “Because of COVID-19, we’ve all learned new and vital lessons about effective risk management over the last year, so that disruption preparedness is now top of organizations’ priorities. The challenge is about how this readiness is sustained. It is the time for the profession to show in real ways how it helps organizations change behavior, rethink risks and how accountants can help set the tone from the very top”.