MUMBAI:
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.
In the report, two ACCA members in India share their views. Aanchal Makwani became a risk management associate at Abans Group in Mumbai, after passing her ACCA exams recently, and explains how risk management appealed to her as a career choice. Aanchal is currently working on project risk management for the creation of a commodities trading application with multiple built-in automated features to improve client engagement and user experience. The application can also make business run more efficiently by reducing human errors and long-term costs. Anchal says: ‘In India, there’s a lack of faith and familiarisation with online processes in some areas, but the digital shift is happening whether we like it or not and there will always be a case for adding value during changing times.’
Arpit Vashishtha, an ACCA member from Bengaluru and management analyst at ED&F Man talks about risk and the need for legal contracts to ensure business continuity. He says in the report: ‘A supermarket, for example, is not active during the lockdown, but they still have to pay the rent. An Act of God legal provision could be contended to avoid paying those rental amounts since the property wasn’t actually being used due to circumstances out of the hands of either party. Although most of these contentions would not stand in a court of law, legal risk, or the importance of having a tightly knotted contract, is something companies are waking up to and considering more comprehensively now than before.’
Rethinking Risk for the Future 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.’
Helen Brand, ACCA’s chief executive adds: ‘Because of COVID-19, we have 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’s 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.’
Rethinking Risk for the Future concludes that risk can no longer be managed in isolation, with Mohammed Sajid Khan, head of ACCA international development ending: ‘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.’
