It has extended longer than any of us ever imagined and was not sparked by a financial crash or political event.

It has hit everyone between the eyes and accelerated many existential risks that were already emerging but had nevertheless been neglected by even the most mature risk frameworks around the world. Most best-practice risk frameworks saw either a high transmissible virus or the next economic crisis on the horizon but not the disruption of the two combined. No one could have predicted the extent of the lockdowns and other associated geopolitical risks. The question now is how can we rethink risk in this new fast-changing, complex world.

A new dawn for accountancy Risk management as we knew it has been catapulted by the ongoing pandemic, and accountants have been presented with an unmissable opportunity to reassess how they can add more value in this transformation.

Accountancy is playing an increasingly larger role in navigating organisations through the urgent problems and interconnected risks they now face by helping them find the missing links and better address stakeholders’ changing needs. For example, through their responsibility for reporting, accountants can provide deeper scenario analysis and optimise predictive analytics that generate more forward-looking insights for decision makers. This builds on previous discussions of these factors in both ACCA/PwC Finance Functions: Seizing the Opportunity (ACCA-PwC 2021) and ACCA/CA ANZ Analytics in Finance and Accountancy (Evett et al 2020).

‘In a world where trust has become vulnerable, the role of the accountant has become more necessary than ever.

From the IFAC [International Federation of Accountants] perspective, the accountant of the future is the one who thinks about the planet, people, purpose, and then profits,’ says Sanjay Rughani, CEO of Standard Chartered Bank Tanzania and chair of the International Federation of Accountants’ PAIB Advisory Group.

ERM’s evolving doors The role of accountancy in helping organisations understand and effectively manage risk goes beyond reporting about the past. It involves using the information that we gather to plan for the future. Accountancy is becoming more engaged in risk advisory in the sense that we help organisations change corporate mindsets to a new long-term thinking needed to survive and thrive in the new normal. Best-practice risk management requires staying ahead of risk, constantly refreshing our approaches to it and looking for new information to enable this. We have also learned that it is not enough to think about our risk frameworks and business continuity plans on an annual or even daily basis. Risk monitoring needs to be a continuous enterprise-wide activity. We discuss accountants’ understanding of business and data models further in ACCA’s The Digital Accountant (Webb 2020).

Governance in the risk galaxy As guardians of information, accountants understand business models and how best to organise the frameworks needed to help companies achieve their objectives, while also meeting various stakeholder expectations and building the necessary trust. The world was already going through enormous geopolitical, social and digital transformations before COVID-19 struck, but the level of uncertainty these changes pose along with the exigencies of climate change have been exacerbated by the global pandemic. Accountants can help companies understand what these rapidly changing risks mean and make sure they do not miss the associated opportunities.

In particular, they can help companies attain more sustainable outcomes for long-term success by integrating environmental, social and governance (ESG) matters into their decision making and assessing ESG impacts on the financial, industrial, agricultural, and ecological systems on which they depend.