Importance Under the current laws, business entities have discretion to choose accounting methods, structure and content of financial statements. The existing differences of accounting principles, International Financial Reporting Standards and Russian accounting regulations give rise to uncertainty in applying the effective accounting standards. Uncertainty, in turn, causes a variety of accounting risks having an adverse impact on the quality of financial statements and, to a large extent, affecting the financial condition of insurers. One of the major reasons for this is the difficulty to study the economic nature, direct and inverse links of accounting risks and the stemming obvious underestimation of this phenomenon. The theoretical and methodological issues of researching risks as objects of accounting served as the subject of the study. Objectives The objective was to propose an accounting and reporting methodology for potential losses associated with the effects of accounting risks. Methods In the paper, I analyzed the views of scientists on such an aspect as formation of provisions by using the methods of empirical knowledge. I also applied the observation, comparison, and detailing techniques to justify the need to amend the existing Russian accounting system to the extent of provisioning. Results Idemonstrate the need for creating provisions to eliminate the implications of accounting risks. The theoretical and practical significance of the study is that the theoretical and methodological insights, as well as practical recommendations fill the gap in the organization of the process of accounting risk assessment, and may be used in the activity of all commercial insurance entities. Conclusions and Relevance I conclude that using the technique enables to reduce the effects of risks and to report a realistic asset value in the financial statements of insurers to attract investment.
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