By IMA, Special for USDR
According to a new report released by ACCA (Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants), companies must regularly and systematically consider emerging risks to fueling innovation. For more information on the report, written by Dr. Paul L. Walker, Ph.D., CPA, Innovation and ERM: partners in managing waves of disruption can be seen here: http://www.imanet.org/resources-publications/thought-leadership-new/new-risk-management-internal-controls/innovation-and-erm-partners-in-managing-waves-of-disruption
Traditional thinking about strategy has become less relevant as a wave of disruption accelerates the pace of business. The report highlights key ways that enterprise risk management (ERM) can be successfully tied to strategy and innovation, including:
- Interpreting disruptive waves: By incorporating risk-sensing tools, companies can more easily predict and respond to waves of disruption.
- Rethinking strategy and tools: With tools that enhance understanding of risk, companies can develop and alter key assets to combat changes in the external environment.
- Innovating business models: When responding to risk, it’s important for businesses to not only innovate in their fields, but also consider business model innovations.
In the accounting and finance profession specifically, understanding risk is a key to successfully divert a company from failure to success. As a result, there is growing pressure for accountants to develop business-risk acumen on top of their financial expertise.
“Financial professionals are typically risk averse but need to expand their comfort level to become true strategic players,” saidRaef Lawson, Ph.D., CMA, CPA, vice president of Research and Policy at IMA. “CFOs and future finance professionals need to have a mind shift from accounting and control to a focus on the drivers of value in the business.”
ERM does not only enable a company to innovate but can also protect it from the downside of innovation. Companies that do new and strategic things to create their own wave of disruption must also manage the associated risk and uncertainty. This requires a different approach that captures new thinking and new risk tools.
“Innovating without knowing the associated risk is a primary reason for failure in business,” said Faye Chua, head of Business Insights at ACCA. “Being proactive in planning against unforeseen challenges paves the way to succeed in times of uncertainty.”
This report is a product of the strategic partnership between ACCA and IMA, focusing on research studying the future of the global accounting profession.
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com
About IMA (Institute of Management Accountants)
IMA®, the association of accountants and financial professionals in business, is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) program, continuing education, networking and advocacy of the highest ethical business practices. IMA has a global network of more than 80,000 members in 140 countries and 300 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe and Middle East/Africa. For more information about IMA, please visit www.imanet.org.