A NEW report by the Association of Chartered Certified Accountants has stated that for risk to be managed, businesses need to work harder to spread responsibility for risk management across the whole organisation.The survey of over 2,000 ACCA members found accountants at the business coal-face have a vital role to play in successful risk management, and that they stand ready to do more.The survey also found a statistical link between the use of accounting practices that contribute to managing risk and lower occurrences of dysfunctional behaviour. The survey also found differences in the perception of a company's exposure to risk between those at board level and those accountants working below board level.According to the Country Manager ACCA Nigeria, Toyin Ademola 'Risk happens at all levels of business. It doesn't sit in silos. Risk management needs to be something that is undertaken by everyone in an organisation so it is fully integrated. The survey shows that accountants have an excellent grasp of the risks faced by their organisation and the steps needed to manage those risks. The accountant's day-to-day role is all about managing risk, even if people don't think about what they do in that way'.'The results are both encouraging, in terms of what accountants do and would do more of, and frightening in terms of the extent of dysfunctional revealed. There is a big problem to be addressed. Businesses need to make sure they use the risk awareness and risk management skills of their qualified accountants, and not miss an opportunity to effectively integrate risk management', Ademola added.However, the survey did find a statistical link between the use of good risk management practices by accountants and incidences of dysfunctional behaviour: more good practices correspond with less dysfunctional behaviour. Types of good practice include aspects of management accounting, forecasting, reporting and quality controls, decision support and controls over wrongful behaviour.The survey also found that those in more junior roles are more aware of both risks and 'bad behaviour' than their board-level colleagues'Non-executives were more likely than anyone else to identify 'personality' factors ' such as planned dishonesty or the opportunistic abuse of power ' as causes of problems rather than more controllable factors, such as financial pressure on an organisation' explains Ademola.'They were also much more optimistic about the frequency of 'bad behaviour' than anyone else, and were more enthusiastic about management tools that the survey shows to have debatable effectiveness, such as budgetary controls.'It may be because senior levels are less involved in the day-to-day running of the organisation, or because they are taking a broader view of the business. It might be that the way information is reported to them needs to be improved.'The survey findings have been used by ACCA to develop an online 'risk healthcheck' for businesses. Using this resource, businesses can compare themselves to the practices and experiences of businesses from the survey, and identify areas for improvement.Ademola further explained noting: 'Risk management has since risen up the agenda, but its importance has not always been reflected in budgets or actual actions and there is a danger it will be forgotten about once the current crisis has passed.Businesses need to take this opportunity to properly integrate risk management into their business processes. Integrated risk management is vital for any business that wants to pursue sustainable growth. We hope businesses take advantage of the insights on offer as part of the 'healthcheck'.
Click here to read full news..
