QUESTION: Many CFOs are frustrated by how often their companies face significant new business threats, a study by the Financial Executives Research Foundation suggests. Of the 55 financial executives of Fortune 500 companies interviewed for the study, 24% said they dont see significant changes and unknown threats to the business until it is too late. The level and speed of disruptive risk is providing a challenge for executive teams to recognise the sources of disruption and how it will drive potential risk and opportunities for the company, said Mark Frigo, CPA, CGMA, professor of strategy and leadership at DePaul University and the director of DePauls Center for Strategy, Execution, and Valuation. The financial executives interviewed for the study ranked sources outside the company as the most telling about new business trends and disruptions, followed by customers and competitors. Sources inside the company ranked fourth. Even more important than seeing the business threat, study respondents said, is the ability to link a change to the business model and strategy. To provide strategic leadership, expertise in accounting, finance, and strategy is not enough, according to the financial executives interviewed for the study. CFOs also need the following skillset: Ask the right questions. To know what matters and to envision new markets or business models, CFOs need to have deep knowledge of what drives the market, what customers expect, and what competitors are doing. Collect the right information and share it. Processes and tools are available to collect risk information, but CFOs need to understand the limits of the data. Identifying risks and labelling some as strategic is not sufficient. A thorough strategic risk analysis leverages enterprise risk management (ERM) frameworks, such as the one developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Sharing the data, rather than just sharing conclusions, helps others in the organisation understand the analysis and why managing identified risks is important to them. Identify risk/value drivers in the data and help others understand them. Intangible assets, such as monthly digital users, can be early indicators of a change in the competitive landscape. CFOs need to be able to identify them and explain why they are important. Develop a culture committed to mitigating risk. To focus on how risk management can help achieve business objectives, CFOs should start a conversation at the executive or board level about changes, strategy, risks, business model, and the companys future. ERM frameworks help increase risk awareness on the board. Given the efforts of COSO to highlight strategic risk dimensions, for example, CFOs following COSO should expect board members to ask more strategic risk questions and be prepared to address them. Align the companys business model and strategy with the risks. An analysis of the data generated within an ERM process helps determine whether a risk management strategy is on track or whether a change in strategy is necessary. CFOs need to apply their financial expertise to determine any adjustments or realignments. Fail fast and shift gears quickly. A change in direction can create new risks for a company or raise the significance of established risks. To respond promptly, CFOs need to understand how a business strategy is executed operationally, for example, in product development and sales. It helps to get various business units together a couple of times a year and have a conversation about risks and/or business models. By staying on top of how risk management strategies are working, CFOs can exit businesses before they collapse. The stance may take courage, but having thought through key aspects of risk management makes the decision easier. REQUIRED:- With reference to the above, discuss the roles of management accountants, the required skills and possible management accounting tools that can provide business intelligence to support strategy and influence decision-making, driving their organisations to mitigate and adapt to change. The answer scheme should also include real life company examples, where relevant. (Total: 100 marks)