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Currency turmoil, price, and profit in global markets Logo aicpa

  Mark D. Mishler, CPA |   Free |   AICPA |   01 Mar 2017 |   Journal of Accountancy

Currency rate fluctuations affect the supply chain and raise questions about who should bear the brunt of the fallout. Small and midsize multinational companies can use the strategies discussed in this article to manage the risks of volatile foreign currency exchange rates.

Topics covered:
  • Management accounting: Technical: Corporate finance & treasury management: Treasury policies & treasury risk management, Intermediate
  • Management accounting: Technical: Risk management & internal control: Risk identification & assessment, Intermediate

2 Comments/Reflections

David Burton

David Burton Aug 2017

Interesting article highlighting the need for both a financial risk management strategy and a operations product pricing / purchasing strategy as part of an effective foreign exchange risk strategy.

The need for effective protection of an export / import business through transfer of currency risk and or purchasing raw materials in the same currency that you trade with your end customer in is discussed.

Historically I would have tended to focus more on the financial risk management element but going forward I will give more thought and weight to the elements of  operational strategy in managing Foreign currency exposure.
Tendai Nyakurimwa

Tendai Nyakurimwa Mar 2017

The article is quite informative. Foreign exchange flactuations ate very common especially with the unstable world economic situation we are experiencing. Brexit has also worsened the problem. African countries are heavily exposed to these movements and companies operating in the continent need to come up with measures to mitigate the risks.

I will look forward for opportunities to use the knowledge gained in this article.