The Role of Financial Accounting in Enhancing Corporate Resilience and Risk Management

The increasing complexity of global economic and financial systems has heightened the importance of resilience in corporate structures. Financial accounting plays a critical role in risk identification, assessment, and mitigation, key to fostering transparency and stability. This paper examines how financial reporting practices contribute to corporate resilience by enhancing risk disclosure, supporting informed decision-making, and facilitating adaptive strategies. It explores the evolution of financial accounting frameworks in response to economic disruptions and regulatory changes, emphasizing the role of financial statements, fair value accounting, and impairment testing in assessing financial health under uncertain conditions. Additionally, the paper analyzes how companies leverage accounting tools such as accrual-based earnings management, financial ratios, and stress-testing methodologies to anticipate and respond to financial distress. By integrating theoretical insights with empirical evidence, this study highlights the strategic function of financial accounting in sustaining corporate resilience and risk management.