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The role of accounting in mitigating food supply chain risks and food price volatility
1 Independent Researcher, UK.
2 Independent Researcher, Maryland, USA.
3 Access Bank Plc, Nigeria.
4 Independent Researcher, Athens, Georgia.
5 Sanctus Maris Concepts Ltd, Nigeria.
6 Independent Researcher, Lagos, Nigeria.
Review
International Journal of Science and Research Archive, 2024, 11(01), 2557–2565.
Article DOI: 10.30574/ijsra.2024.11.1.0340
Publication history:
Received on 14 January 2024; revised on 25 February 2024; accepted on 27 February 2024
Abstract:
The global food supply chain is a complex network of interconnected processes and actors that play a critical role in ensuring food security and stability. However, this intricate system is susceptible to various risks and challenges, including natural disasters, geopolitical tensions, market fluctuations, and regulatory changes. These risks often result in food price volatility, which can have profound implications for both consumers and producers worldwide. In this context, accounting emerges as a vital tool for mitigating risks and managing food price volatility within the supply chain. Accounting serves as a cornerstone in providing accurate, timely, and reliable financial information essential for decision-making at every stage of the food supply chain. Through effective financial reporting and analysis, accounting enables stakeholders to identify, assess, and respond to potential risks proactively. By employing risk management techniques such as scenario planning, sensitivity analysis, and hedging strategies, accounting professionals can help organizations anticipate and mitigate supply chain disruptions, thereby reducing the impact of food price volatility. Furthermore, accounting facilitates transparency and accountability within the food supply chain, enhancing trust and cooperation among stakeholders. Through comprehensive cost accounting and performance measurement systems, organizations can identify inefficiencies, optimize resource allocation, and enhance operational resilience. Moreover, accounting frameworks such as sustainability accounting enable businesses to assess and report the environmental and social impacts of their operations, fostering sustainable practices across the supply chain. In addition to its role in risk management and performance optimization, accounting contributes to regulatory compliance and governance within the food industry. By adhering to accounting standards and regulations, organizations can ensure integrity and accuracy in financial reporting, thereby enhancing investor confidence and mitigating legal and reputational risks. Moreover, accounting professionals play a crucial role in designing and implementing internal control systems to prevent fraud, errors, and misconduct, safeguarding the integrity of the supply chain. Accounting plays a multifaceted role in mitigating food supply chain risks and food price volatility. By providing financial insights, promoting transparency, and ensuring compliance, accounting empowers organizations to navigate challenges and promote stability in the global food system.
Keywords:
Accounting; Food; Supply Chain; Risks; Price Volatility; Mitigating; Review
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Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0
