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ACCA publishes report on risk reporting

  • ACCA (UK Association of Chartered Certified Accountants) (lt green) Image

18 Dec 2014

The Association of Chartered Certified Accountants (ACCA) has issued a report addressing the way in which businesses report the risks they face.

Reporting Risk, which was compiled from a range of interviews with senior industry figures over the course of a year, says that users, preparers and advisers in risk reporting agree that risk reporting needs to improve. 

Ewan Willars, Director of Policy with ACCA, said:

There are concerns that risk-reporting is currently seen as being ‘tick-box’ and process driven, with organisations reluctant to be frank. There was also felt to be little or no challenges from boards, auditors or investors about the potentially damaging ‘what-ifs’ which could destroy businesses. 

Report users we surveyed, including analysts, called for risk reports to clearly identify key risks faced by a company, with an explanation of why management believes these risks to be critical and what they are doing to mitigate the risks. A good risk report should identify new and emerging risks and explain how management assesses risk throughout the year. 

Our report concluded that proactive involvement by risk report users can only encourage better practice. Good risk reporting, in turn, gives investors greater confidence.

We believe that greater disclosure of risk is not a threat - but a chance to demonstrate the strength of the company’s controls and management. It is also critical that the conversation about risk reporting continues as that will help to improve the quality of those reports.

Click here to read the report in full (link to ACCA website).

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