The Effects of Supply Chain’s Accounting and Financial Risks on Business Achievement

Abstract

Supply chain is the management involving demand, supply, and cash. The chain starts from the point of origin of goods to distributing them to the end customers. On the supply chain process, certain accounting and financial risks can occur at any time such as market volatility, inconsistency between asset and liability, liquidity, credit risk, financial statement, manipulation of changes to accounting standards from the Federation of Accounting Professions, amendments to taxation laws in addition to lack of skills, knowledge and understanding in business accounting standards. All these risks can occur on any aspects of the process. Accordingly, when risk occurs, it will definitely affect the whole supply chain. Therefore, to prevent the damage happening to the process, this article intends to show the importance of awareness about the effects of accounting and financial risks in the supply chain as well as to present a financial instrument to prevent such risks.