Staying ahead of risks – the rise of the accountant as the ‘guardian of information’

An unmissable era is dawning for the accountancy profession and its role in effective risk management as a result of the global pandemic, environmental sustainability and economic turbulence, says ACCA (the Association of Chartered Certified Accountants).

In its new report Rethinking risk for the future, ACCA asserts that as guardians of information, accountants can help organisations not only detect and better understand the emerging risks and opportunities facing them, but also cultivate the mindsets needed to think more long-term.

Capturing the views of its global members, the report also showcases their vital roles in building operational resilience through enterprise risk management (ERM), financial reporting and predictive data analysis.

The report explains that while Covid-19 is the biggest crisis in a generation, business and society also face huge risks from rapid climate change – perhaps the biggest risk of all. Risk management has therefore been forced to centre stage like never before. Accountants now have an unmissable opportunity to reassess how they can add more value in a post-Covid world where a myriad of pressing environmental, social and economic risks are prevalent.

Rachael Johnson, report author and ACCA’s head of risk management and corporate governance, says: “What’s clear from our engagement with ACCA members is the need for professional accountants to truly understand the strategic and business risks that their organisations face in the short, medium and long-term. In this way, through providing better informed decision making, they can help organisations maintain operational resilience and become more sustainable in today’s fast-changing, interconnected environment.”

Lloyd Powell, Head of ACCA Cymru Wales, adds: “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 organisations’ priorities. The challenge is about how this readiness is sustained. Professional accountants are central to all this – that’s why now is the time for the profession to show in real ways how it helps organisations change behaviour, rethink risk, and how accountants can help set the tone from the very top.”

Online polling across different ACCA markets around the world reveals members’ concerns about industry disruption being the biggest risk to organisations over the next two years, followed by international trade, cyber threats and extreme weather.

ACCA fellow Israel Opio, CRO at Ecobank Uganda and member of ACCA’s Global Forum for Governance, Risk and Performance, says in the report: “Sustainability is about creating value and I believe this is where risk management is headed. Missing the opportunities that these strategic risks present is itself a massive risk to the business.”

Rethinking risk for the future concludes that risk can no longer be managed in isolation, with Rachael Johnson concluding: “Accountants, given their skills and professional duties, are in a privileged position to optimise their storytelling skills in new ways by creating more dynamic metrics and reporting methodologies. Accountants should be taking on a more advisory role in explaining the facts and possibilities behind the numbers, breaking them down and putting them into context for their organisations.

“This is an unmissable opportunity for accountancy to encourage more collaboration and collective action on environmental, social and governance matters by working with public policymakers and partnering with leaders to help grasp how digitalisation and new technologies can help avoid harm to people and the planet.”

The report can be downloaded here: https://www.accaglobal.com/gb/en/professional-insights/risk/rethinking-risk.html