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The survey shows accountants have an excellent grasp of the risks faced by their organisation and the steps needed to manage those risks. The survey also shows clear support among accountants for ‘challenging senior people’ as being part of good business culture. Accounting is really about providing information to help make good decisions, and good decisions mean less risk. 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 value of accountants’ contributions can be lost through their misuse. Accountants in the survey reported very high levels of ‘bad behaviour’ around risk management. Examples include frequent ‘gaming’ of forecasts, providing optimistic versions to avoid criticism or pessimistic ones to reduce expectations.
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. Accountants who thought dysfunctional behaviours most widespread, most wanted to make more use of the good practices.
Some of the highest scores for good practices were from small organisations. Their stereotype as unsophisticated is perhaps an oversimplification.
The survey also found those in more junior roles are more aware of both risks and ‘bad behaviour’ than their board-level colleagues.
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.
Paul Moxey, head of risk management and corporate governance at ACCA, said: "This is a very timely report as now is a critical time for risk management. The financial crisis highlighted the disastrous consequences of senior management effectively ignoring risk management. Risk management has since risen up the agenda, but its importance hasn’t always been reflected in budgets or actual actions and there’s 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."