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The past twenty years have seen a significant increase in the use of derivative financial instruments by companies throughout the world (Berkman and Bradbury 1996; Berkman, Bradbury and Magan, 1997a; Berkman, Bradbury, Hancock and Innes, 1997b; Bodnar, Hayt, Marston and Smithson, 1995; Bodnar, Hayt and Marston, 1996; 1998; Collier and Davis, 1985). This paper examines the impact of Financial Reporting Standard 13: Derivatives and Other Financial Instruments, Implementation and Disclosures, on treasury department activities. In particular, the researchers conducted interviews with UK treasury department staff to assess their general attitudes to, and the perceived impact of, FRS 13. In general, the treasurers responded favourably to the standard, and considered the narrative disclosures to be particularly useful. The numerical disclosures were considered to be very detailed and specialised; interviewees thought that users might have difficulty in understanding them. However, the implementation of IAS 39, that becomes mandatory for all EC countries from 2005, was causing treasurers far more concern.

This paper reports the results of an empirical study undertaken during 1988 into firstly the opinions of corporate treasurers in UK multinational corporations on the process of financial innovation and the relationship between the corporates and their banks in the context of this process, and secondly the use of financial innovations in the MNCs' management of foreign exchange risk. It concludes that in general treasurers were sceptical about financial innovations, and that the relationship between the corporates and their banks appeared to be going through a difficult phase reflecting the breaking up of traditional links between banks and their corporate customers. The findings on the use of financial innovations varied; while currency futures were not used at all by the MNCs, the treasurers tried out the use of currency options and swaps. A general conclusion was that the corporates' exchange risk management practices were short term orientated and innovations were incorporated into the day‐to‐day management of positions rather than into longer term strategic decisions.

The purpose of this paper is to study the effects of financial accounting standards on the economic decisions of managers. The primary research question addressed in the paper is whether the hedging behavior of corporate treasurers in France has been affected by the issuance of International Accounting Standard No. 39 and International Financial Reporting Standard No. 9 dealing with financial instruments and hedging.

In all, 48 semi-structured interviews were conducted with French corporate treasurers. The interview instrument is included as an exhibit to this paper. The interviews were recorded and transcribed. In addition, three interviews were conducted with representatives of Big 4 audit firms who are experts in accounting for financial instruments. The empirical findings are interpreted using a theoretical framework derived from Jean Baudrillard who argues that the “map” (accounting results) tends to define the “territory” (economic decision-making) in a period of “hyperreality” (when the underlying economic reality is confused). In other words, accounting standards, and the reported numbers that result from such standards, can influence the economic decisions of managers and not merely represent the outcome of economic decisions already taken.

Corporate treasurers often make decisions based on earnings impact. This finding is similar to findings in prior literature regarding the effects of accounting standards on economic decisions taken by managers. A fear of increased earnings volatility is central to the treasurers’ concerns. Also key is the complexity of the process for qualifying financial instruments for hedge accounting treatment. The authors also find that the behavior of corporate treasurers is neither stable nor homogeneous. The behavior appears to be the outcome of a collective learning process in which the corporate treasurer is only one actor.

The type of qualitative research undertaken in this study has its limitations. It cannot be demonstrated that the findings are generalizable. There is a contextual specificity to the treasurer’s function, which reinforces a particular focus on accounting results. The CFO is simultaneously the superior of the treasurer and responsible for financial reporting, and consequently subject to a conflict of interest that does not necessarily apply to other types of managers. Therefore the findings cannot apply to all managerial functions.

The authors found that corporate treasurers focus on accrual-based earnings despite engaging in a function that is supposed to focus on cash flows. Even if the IASB believes that accounting standards should be used primarily by investors and creditors, they should acknowledge that there is a fear of earnings volatility by managers, and that there is an temptation toward increased use of other comprehensive income as an alternative to reporting volatile earnings numbers.

The research provides support for those who argue that international accounting standards that require fair value accounting for financial instruments have had a negative pro-cyclical impact on the real economy.

This paper is a qualitative research study conducted in an area of research where there have previously been only quantitative studies. The access to a large number of French corporate treasurers is unique. The study supports prior findings regarding the influence of accounting standards on managerial behavior, but with an added theoretical interpretation related to Baudrillard’s arguments regarding the nature of the “map” and the “territory” in complex economic systems.

Most small businesses today could probably benefit from a management audit of the firm's long‐term financial affairs. In large corporations, internal auditors generally have free rein to audit all operations—including the activities of the corporate treasurer and the controller's department. Such audits involve not only the financial aspects of operations, but the day‐to‐day operating aspects as well. Internal audits of operations are typically called operational audits in the United States and value‐for‐money audits in the countries of the British empire. “Value‐for‐money audits” is probably the best name because the objective of the auditors is to point out ways that a department can save money or enhance revenues. Now it would be nice if small businesses had internal auditors to conduct value‐for‐money audits, but such is not the case. Most small companies do not have internal auditors. However, there is another alternative. The owner or manager of a small business can conduct the audit on sort of a do‐it‐yourself basis. Although every department could possibly benefit from such an audit, it is the long‐term financial management of the organization that might profit the most from a value‐for‐money audit.

This study seeks to explore the financial priorities, financial planning and control practices in locally‐established voluntary organisations (LVOs) in a developing country context.

Two data collection methods are used to gather views from the LVO treasurers: a questionnaire survey and face‐to‐face interviews.

Treasurers are less focused on priorities involving internal planning and control and are found to be using financial planning and control practices to a limited and seemingly unsophisticated extent. In consideration of the theoretical implications of organizational legitimacy, overall findings suggest that internal practices are: extensively used to convey a symbolic message of rationality, in the pursuit of a pragmatic or a moral form of legitimacy towards a defined funding body or towards a perceived internal target audience, respectively; used in a limited and informal way due to their perceived inappropriateness in legitimating organizations, in “deference” to the voluntary organizations' (VO) primary social objectives; or are virtually inexistent, due to the strong influence of trust embedded in an “emotional‐led” context, thereby explaining the irrelevance of financial/control practices – even for symbolic reasons.

The questionnaire response rate has been relatively low but the findings are enhanced by the diversity of organizations which participated in the questionnaire and interview stages.

This study focuses on locally established organizations in a developing country context, which are typically less subjected to VO regulation and are “managed” by (unpaid) volunteers. The interviews involved a cross‐section of LVOs, which has been instrumental in contemplating the potential relevance of the legitimacy perspective.

For bankers to feel comfortable in their relationships with large corporates, a precise understanding is needed of who, within that company, engages the relationship, and how it can be better managed. The corporate treasurer is the first and most impressive obstacle in selling financial services to an organisation but must be dealt with bearing in mind the diverse group of people making up the Decision Making Unit (DMU) that this person represents. The ensuing negotiation will be based on power (the bank illustrating why its proposals are superior to competitors'); time (the bank being aware of the client's deadlines); and information (understanding the degree of client needs, limitations, and willingness to make concessions). In a collaborative atmosphere, the corporate treasurer will be impressed that the bank's aim is to assist rather than exploit.

An operational audit (or value‐for‐money audit) is an organized search for ways of improving efficiency and effectiveness. Although internal auditors have traditionally performed most operational audits, such audits are also conducted by external auditors and by company managers who wish to make self‐audits. Whoever performs an operational audit, the objective is to assist managers in performing their daily functions more effectively and economically. In effect, an operational audit is an early warning system for the detection of potentially destructive problems. Traditionally, operational audits have been conducted by means of a questionnaire interview of departmental employees. Virtually all large companies conduct operational audits in their major production and service departments. However, working capital management has often been ignored in these audits. Perhaps this oversight is caused by the view that the controllership and treasury functions are high level departments that are not susceptible to scrutiny by internal auditors. Alternatively, the oversight may be attributable to the feeling that there is little standardization of duties among controllers and treasurers in the management of working capital. Whatever the reason, this article is intended to end the oversight. An operational audit can lead to better management of working capital in the same way that it can lead to better management of a production area. The questionnaire in Exhibit 1 can be used by internal auditors, or by a treasurer who merely wants to perform a self‐audit of his or her own department's efficiency and effectiveness.

The author argues that in difficult times for risk and corporate governance the corporate treasurer is increasingly the most valuable source of information for non‐executive directors. Risk is at the heart of the work of the corporate treasurer. This is particularly true in financial services industries.

Investigates how large UK multinational firms evaluate individual and multiple banking relationships, and how they exercise control over their portfolios of banks. The identification and description of how firms do this is important for those banks marketing a wide range of financial services to the corporate sector. Between 1986 and 1990, 15 confidential corporate case studies were developed from interviews with UK firms. The case firms were a sample of 15 large UK‐based multinational companies (MNCs) drawn from the FT100. Senior finance personnel were interviewed during 1986‐90 in all 15 firms using a semi‐structured questionnaire. Uses a theoretical perspective to interpret this decision behaviour and explores the nature and function of these decision rules.

The purpose of this paper is to investigate how trustees of small English registered charities understand and own the reporting and accounting requirements with which their charities must comply.

The research described is a multi-pronged qualitative and inductive study of three small Yorkshire charities as they approve their annual accounts. The case studies are based on observations of trustee meetings and interviews with a range of trustees and their independent examiner or auditor. The use of a practice lens focuses on the behaviours of individuals to understand the sense that they make of their charity’s accounts.

Trustees' understanding of their financial statements is limited; they tend to rely on key individuals who have knowledge. Group responsibility creates a shared way of understanding the financial statements. Treasurers and independent examiners simplify information for the trustees even resorting to corner cutting and rule bending. Narrative reporting is given very little attention. Trustees read their financial statements as a report to them not by them; accountability notwithstanding, thus ownership of their financial statements is conferred not intrinsic.

The findings are drawn from three specific case studies and therefore cannot be generalised, but they offer rich qualitative insights into small charities’ accounting and reporting.

This research provides a unique multi-viewpoint analysis of charity practices, and through its use of a practice lens dives deeper into examining trustees’ understanding and behaviour.