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The Role of Accounting in Risk Management on the Example of Financial Institutions
Dutchak I. B., Vasylisnyn S. I., Yatsko M. V.

Dutchak, Iryna B., Vasylisnyn, Stanislav I., and Yatsko, Maksym V. (2024) “The Role of Accounting in Risk Management on the Example of Financial Institutions.” Business Inform 6:300–307.
https://doi.org/10.32983/2222-4459-2024-6-300-307

Section: Accounting and Auditing

Article is written in Ukrainian
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UDC 657.6:336.71:005.334

Abstract:
The article discusses the role of accounting in identifying and managing risks, in particular on the example of financial institutions. The specifics of financial institutions and their risks, in particular credit, interest, liquidity and market risks, are studied. The article defines the role of accounting in assessing these risks, as well as in managing them through internal control, analysis of financial statements and development of risk management strategies. Specific examples and guidance are provided on how accountants can identify, assess, and minimize risk in financial institutions while ensuring compliance with norms and regulations. The aim of the study is to substantiate the need to involve specialists in the accounting and analytical profile in the process of making effective decisions on risk management of a financial entity. In modern conditions, financial institutions are in an unstable economic, political and technological environment, which leads to a significant increase in uncertainty. This creates a complex set of potential risks that, if mismanaged, can lead to losses, damage, or even destroy the company’s business model and reputation. One of the key competencies of accountants today is the ability to identify potential risks in time to avoid them or effectively manage them. The scientific novelty of the study lies in the disclosure of the expediency of involving accountants in the decision-making process and the development of a policy of integrated risk management of a financial entity in order to preserve its value. It is concluded that a professional accountant is important in risk management for financial institutions and the role of a proactive approach to risk management, in which accountants are key players, is emphasized. It is emphasized that integrated risk management should be considered as an important aspect of modern business, which helps organizations to effectively manage various types of risks, including financial, operational, reputational, etc. This approach allows companies to more accurately analyze, assess, and manage risks, minimizing potential losses and increasing the likelihood of achieving their goals. Integrated risk management involves the implementation of specific strategies, processes, instruments, and systems that are integrated into the company’s overall strategy and business processes. This approach also contributes to increased transparency and improved corporate governance, which in turn increases trust from investors, partners, and customers. In addition, integrated risk management enables companies to be more adaptable to changing market conditions and respond quickly to potential threats and opportunities.

Keywords: financial risk management, performance audit, regulatory standards, capital optimization, accounting.

Fig.: 2. Tabl.: 1. Bibl.: 13.

Dutchak Iryna B. – Candidate of Sciences (Economics), Associate Professor, Department of Accounting and Auditing, Ivan Franko National University of Lviv (1 Unіversytetska Str., Lvіv, 79001, Ukraine)
Email: [email protected]
Vasylisnyn Stanislav I. – Doctor of Sciences (Economics), Professor, Director, Institute of Accounting and Finance of the National Academy of Agrarian Sciences of Ukraine (10a Heroiv Oborony Str., Kyiv, 03127, Ukraine)
Email: [email protected]
Yatsko Maksym V. – Candidate of Sciences (Economics), Associate Professor, Department of Accounting and Auditing, Uzhhorod National University (3 Narodna Pl., Uzhhorod, Zakarpattia region, 88000, Ukraine)
Email: [email protected]

List of references in article

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