Risk and control self-assessment and operational risk loss databases provide the foundation for a new branch of accounting focused on non-financial risks

We intuitively understand accounting measures such as profit or equity. The corporate world places great reliance on them. For example, they are used to communicate and evaluate a firm’s financial performance and condition; they determine the extent to which firms can enrich investors, employees and the public purse through dividends, discretionary bonuses and taxes; and they are the primary input to regulators’ assessments of whether a bank is appropriately capitalized and can operate safely.

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