What does accounting risk look like for firms in 2016?
Effective accounting inherently comes with some level of risk, but what risks might you need to keep an eye out for in particular during 2016? Keep reading to see the top ten accounting risks likely to have a significant impact on organisations this year.
- The heightening of regulatory changes and regulatory scrutiny – this could have a noticeable effect on the method of production or delivery of both services and products. This was recently identified through a survey of board members and executives as the number one risk for 2016, the fourth consecutive year it has held that position, which serves to underline just how dominant it is as a potential risk around the world.
- Economic conditions – if these are less than favourable in any markets an organisation currently serves, then opportunities for growth could be seriously restricted.
- Cyber threats – more specifically, an organisation being underprepared to deal with cyber threats, which can cause serious damage to their brand as well as resulting in serious disruption to their core operations.
- Succession challenges and the ability to both attract and keep talent – if either of these are not managed successfully, it may result in a limited capacity to reach operational goals.
- Privacy management and protection of information – areas which are undoubtedly essential to an organisation’s continued success, but which are likely to need considerable resources to be achieved.
- Technological advancements – technology moves fast these days, but innovations can be disruptive. New technologies can result in the organisation becoming outpaced in its ability to manage new risks or to remain competitive. Dealing with these changes can often require major alterations to an organisation’s business model.
- Resistance to change – inevitably, business models need to change as the world advances around an organisation, but not acknowledging the need for this can easily become restrictive.
- Volatile global financial markets – even if this can be anticipated, it can still result in some significant challenges for an organisation to overcome.
- The culture within an organisation – if this doesn’t promote the ethos of identifying and escalating risk issues at the right time, then it’s less likely an organisation will achieve its strategic objectives and core operations can be crucially impacted upon negatively.
- Sustaining customer loyalty – retention has become increasingly tricky as preferences and demographics within an organisation’s existing base of customers continue to shift.