The EAA Virtual Activities Committee is pleased to announce that the next Academic Empathy Dialogue (AED) is on “Risk and risk management in accounting research” which will take place on 4 June at 16:00 CEST. Academic Empathy Dialogues” (AED) are events that host academics coming from different methodological paradigms working on similar topics and ask them to have a conversation on their view of that topic and how they approach it. The aim is to create an opportunity to build bridges between “factions” that sometimes confront each other without making the right effort to understand the other side. The next AED will host Stephen Penman (Columbia Business School, USA) and Tommaso Palermo (London School of Economics, UK), mediated by Christian Huber (Copenhagen Business School, Denmark) on. The event is free for all, registration is now open at this link.

Risks are a central concern for accounting scholars and practitioners alike: from corporate disclosure about risks and uncertainties to strategic risks within enterprise risk management and balanced scorecard frameworks and risk-based auditing approaches. To understand capital markets, corporate performance, valuation practices all the way to managerial decision making, one must understand how institutions, organizations and individuals identify, monitor, assess and mitigate risks.

Accounting research has shown how this happens, from functionalist approaches that seek to explain the “fit” between risk management, management controls and better performance to critical, interpretive approaches that seek to understand the conditions under which organisations and individuals see risks the way they see them. Emerging topics such as ESG pose questions to all of these approaches. Established practices of valuation and auditing maybe in need of re-evaluation in the face of important economic, social, and ecological phenomena which escape easy quantification.

Such developments offer the perfect timing to take stock, ponder future directions, and explore the potential of cross-pollination between different research paradigms on accounting and risk. What is at stake is not just a better understanding of risks, but the use of “risk” as an organising and sensitising concept—one that drives research rather than just being one more object of study. This shift has happened in management and organization studies, sociology, and other disciplines. Can accounting be next to benefit from an analytical focus on risk to shed light on core concerns about disclosure and reporting, incentives and decision-making, managerial control, auditing and compliance?

This EAA empathy dialogue seeks to start such conversation, based on the following guiding questions:

• What is the potential of risk as a research theme to connect different research traditions in accounting?
• What are trajectories for future research on risk from an accounting perspective?
• How does a risk perspective change the study of core accounting concerns?
• And how do accounting concerns change, challenge or enrich a risk perspective?
• How does a risk perspective help to understand how accountants deal with the day-to-day challenges that they face in their work?
• Can risk provide a unifying perspective to explore accounting concerns that have so far approached with different methods and based on different disciplinary boundaries (e.g., managerial vs. financial accounting; quantities vs. qualitative methods; positivistic vs. interpretive approaches)?

Background readings

Penman, S. (2021). Accounting for risk. Foundations and Trends in Accounting, 15(4), 373-507.

Mikes, A., & Kaplan, R. S. (2015). When One Size Doesn’t Fit All: Evolving Directions in the Research and Practice of Enterprise Risk Management. Journal of Applied Corporate Finance, 27(1).