Accountants leading in a volatile world

At a glance

Play a significant role in guiding organisations in volatile times.
Harness enterprise risk management processes to identify vulnerabilities.
Develop effective scenario models provides insights upon which strategic decisions can be based.

Accountancy redefined

Accountancy is being redefined in ways that are expanding and reshaping the role of the profession. Here we explore how accountancy is changing, bringing together findings from our recent research.

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Report by:

Clive Webb, Head of Business Management

The role of the accountant is being redefined, but never more so than in the current circumstances. Accountants have never been more important as strategic advisers.

Leading in the volatile world

The ACCA / IMA Global Economic Conditions Survey (GECS) results for the first quarter of 2026 indicated that accountants were most concerned about international and geopolitical instability for only the second time since the global risks survey was added to the GECS in Q2 2023. The conflict in the Middle East is clearly an immediate contributory factor, although instability is broader than one issue.

Of itself, this is not new. The impact of the complexity of the geopolitical environment is a significant driver in the evolution of the role of the finance function, as ACCA and Chartered Accountants Australia and New Zealand (CA ANZ), in association with PwC, identified in their Finance evolution report. This report identified that the future of the function relies upon its ability to be both autonomous and pre-emptive. This is especially relevant in a volatile world.

Managing enterprise risks are key

The levels of uncertainty and volatility that organisations face in the second half of the 2020s is unprecedented, in terms of scale, extent and speed. Whilst the focus may, for a time, be on any one specific event, these are part of a broader pattern, and it is the combination and the inter-relationship of these events that organisations need to adapt to work with.

For organisations to effectively manage this, the enterprise risk management framework has never been more important. This is an iterative process, one that cannot simply be a ‘once-and-done’ exercise but requires ongoing refinement.

Accountancy and finance professionals are super connectors within organisations. They have unparalleled connections and appreciations of the complexity of the operating models. At a time when these models are being stress tested as never before, bringing that knowledge to bear is essential.

At the heart of any organisation is its risk culture (as explored in ACCA research). The importance of this culture in times of rapid change cannot be underestimated, yet our research suggests that the leadership may often be lacking. Finance leaders need to ensure that not only are their teams attuned to the evolving risk profiles, but also their interactions with other teams must highlight this.

The changing landscape

The financial and business landscape is shifting in this volatile world. Understanding the influences in each of these areas requires data, both financial and non-financial, which can then be modelled to provide insights. Organisations with less than reliable and poorly governed data face challenges.

In this complex environment, there is a high-level of interdependency between any of these areas. These volatilities can be grouped into four themes:

In the volatile business environment, there are several competitive pressures. No one organisation is an island and supply chains are inherently complex, frequently involving cross-border activity. Supply chain risk is now the front line for organisations, yet few appreciate the complexity or inter-dependence of those suppliers one or two levels removed. It is important for organisations to improve data visibility both upstream and downstream (as ACCA / IMA / CIPS discussed in a joint research report). Having this visibility facilitates improved forecasting and enables corrective action to be taken. The concept of focusing production on one core, or minimum viable product, that meets most consumer needs was a key lesson learned from the pandemic, which can optimise the use of resources.

Supply chain costs and pathways are increasingly susceptible to extreme fluctuations. Effective cost control understands the ‘cost to serve’ of key customers and suppliers. Contracts which may, at first sight, appear profitable, may not be so. The potential for fraud also increases and requires active management.

Energy price shocks are increasing in frequency and size compared to the 2010s. The impact on production costs can be dramatic. In the short term, actions such as hedging may help to mitigate some element of the risk. Short-term risk management cannot be at the expense of long-term investment strategies. As underlying cost bases continue to be impacted, organisations need to consider the longer term, such as alternative energy strategies and the balance towards climate tech investments.

In any volatile situation, maintaining effective control of costs is essential. All too often the temptation is to maintain margins by cutting costs. Effective cost control is the application of cost management techniques to focus upon optimising returns. Cutting costs all too frequently means that it is hard to recover. Resources, both human and material, are lost and reinvention takes time.

The volatility extends to changing legal environments. Sanctions are frequently used by governments as a tool, and these have legal and commercial implications. It is important to appreciate the risks before actions happen. Risks of default on contracts increases as customers and suppliers grabble with similar issues. Understanding levels of exposure are essential.

The ability to anticipate, adapt and respond is therefore essential. For organisations, resilience and agility are key priorities. Having the extended risk profile processes in place are essential for swift and robust decision making. Accountability needs to be clear at all levels of the organisation. A lack of clarity can lead to conflicting priorities and dysfunctional behaviours.

Accountability extends to those employees operating in affected regions and ensuring their safety and wellbeing becomes a priority. This includes understanding location-specific risks, maintaining clear communication channels and, where appropriate, drawing on external expertise in rapidly evolving circumstances.

Stakeholders, including those providing financial capital, face an increased uncertainty of returns. Developing a robust narrative, supported by proven insights, is essential. Organisations are increasingly reliant upon good quality data and effective scenario models. This includes preparing information to support commercial insurance relationships where risks can, to an extent, be mitigated.

Disruption is inevitable. Having the continuity plans in place to address contingencies is essential. Such plans need to be regularly reviewed, tested and updated. Only through regular and rigorous testing can weaknesses be identified. Whilst they cannot embrace every scenario or combination of scenarios, updating them to include significant and emerging risks is essential.

Access our crisis management template.

Increasingly, geopolitical tensions are not only played out on the physical battlefield, but they are also realised in the information space, as cyber-attacks. Cyber and information risk represents a key vulnerability for organisations. No organisation can be totally secure. Having appropriate levels of data management and security in place are essential.

The most significant cyber-related threat to any organisation remains the individual. In times of volatility, it is easier to reduce your guard; to forget to question the email address; to trust the email and click on the link. The damage is done. Within the culture of the organisation, now is the time to reinforce the need for good data and information security management.

Mitigation and recovery plans need to be in place which are integrated into broader continuity plans. The complexity of the challenges that organisations face mean that plans focused upon single failures are no longer sufficient. These must have been tested and evaluated on a regular basis.

Cyber-attacks may represent one threat, but the information war also embraces other forms of intervention such as fraudulent claims and invoices.

Disruption to the organisation may include changed working patterns for individuals. These organisational changes can create information security risks, should the necessary policies and procedures not be in place.

Each of the other factors that have been identified in this article coalesce in the risk profile of the organisation. Accepting that ongoing geopolitical and economic uncertainty is a reality is important. Organisations must decide upon their level of risk appetite and develop mitigation strategies and actions accordingly. Finance professionals will provide information to support.

Events are changing faster than traditional forecasting and planning cycles can keep up with. In no way is the past a predictor of the future. The importance of ‘what-if’ based decision making as a tool to guide strategy is clear.

The interconnected global economy no longer just provides the benefit of lower costs of production and potentially higher margins. Instead, it is also a constraint which helps to transmit shocks around the world. A realignment of sources of supply is inevitable, though whether every component in any supply chain can be friend- or near-shored is open to question. Appraising key risks on an ongoing basis is essential.

Accountants leading in a volatile world

The chief financial officer (CFO) is often now regarded as the right hand of the chief executive officer (CEO). In times of volatility, it is essential to deliver on that expectation. By considering each of the risks identified and their financial and operational impact, so the finance leader and their teams can ensure that they provide the pre-emptive advice that their stakeholders are seeking.

The volatile world means that yesterday’s plan is precisely that – yesterdays. Tomorrow’s plan may need to look different. Only by embracing predicative and proscriptive analytics can the function effectively support the organisation. There are several preconditions for a function to be able to deliver upon this:

It needs the capacity to deliver real-time forecasts. Spreadsheet based forecasts are cumbersome and inflexible. Moving towards AI / ML modelling techniques is essential.
However, for these models to be effective they need robust data. Finance functions have an important role to play in ensuring data quality and governance. This is a key evolutionary area for the function, both in respect of financial and non-financial data. It is also important to continue to apply the principles of internal control.
While it is important to have robust models, being able to assess, critique and communicate their output is essential. Any model is purely an extraction of the possible. As the range of possibilities increases, so being able to present them effectively is essential. The role of the finance business partner is key. This requires accountancy and finance professional to continually evolve a robust skill set, as explored in ACCA’s Career Paths Reimagined report.

During times of volatility the importance of effective working capital management increases. Supplier distress can lead to delayed payments. Working with procurement colleagues, finance teams need to ensure that they have robust information on key suppliers, and with sales teams to ensure that similar information is to hand with respect to customers. Effective communication can often address problems before they become a crisis.

Cost of capital can fluctuate causing assumptions on debt interest to be challenged. Lines of credit can be harder to obtain, especially in sectors where there may be a significant exposure to the volatility.

Treasury and working capital management are key functions within the finance team in times of volatility. Once more, effective working capital management relies upon trusted data.

Impairments and contingent liabilities are areas that the finance professional should be mindful of. Disruptions can cause market values of goods and other assets to fluctuate. Investors and other stakeholders are likely to seek greater transparency, particularly in relation to risk exposure and the potential impact upon future performance.

Assumptions and estimates in non-financial data may well be challenged. Finance professionals need to be mindful not only of the financial impacts, but also those in other forms of reporting and performance management.

In more critical scenarios, reinforcing vendor due diligence approaches that focus upon supplier and customer liquidity may be appropriate (as discussed in our Supply Chains research).

Clear, accurate and transparent disclosures are essential to ensure that financial reporting reflects current conditions while maintaining consistency with reporting standards.

These pressures are felt acutely by small and medium-sized enterprises (SMEs), which typically have fewer buffers in cash reserves, staffing depth, or supply chain flexibility – to be able to absorb shocks. For SMEs, the stakes of getting risk management wrong are existential, not merely strategic. This is where the accountant’s role becomes especially vital. For many small businesses, their accountant is the closest thing they have to a CFO: the person who translates geopolitical challenges into cashflow implications, who spots the warning signs in a supplier’s payment behaviour, and who builds the scenario models that allow an owner-manager to make confident decisions under uncertainty. Small and medium-sized practices (SMPs), acting as trusted advisers to their clients, are uniquely positioned to bring this strategic lens to businesses that would otherwise navigate volatility alone. In a volatile world, that relationship is not a luxury – it is a lifeline.

Creating an element of certainty in an uncertain world is a skill. Yet it is one that accountancy and finance professionals are well placed to deliver upon in volatile times.

Conclusion

Creating an element of certainty in an uncertain world is a skill. Yet it is one that accountancy and finance professionals are well placed to deliver upon in volatile times. Finance professionals are no longer solely responsible for recording and reporting financial information. They are increasingly strategic advisers, helping organisations navigate uncertainty, interpret complex risks and make informed decisions.

Delivering upon these actions underlines that accountancy has been truly redefined.