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1 – 10 of 83Orapin Duangploy and Dahli Helmi
Auditors nowadays must be aggressive and involved in risk assessment and analysis. This paper identifies, analyzes, and recommends a solution to a current problem in accounting…
Abstract
Auditors nowadays must be aggressive and involved in risk assessment and analysis. This paper identifies, analyzes, and recommends a solution to a current problem in accounting for foreign‐currency hedges. This is accomplished by an examination of the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivatives Instruments and Hedging Activities, as issued in June 1998. Multi‐currency accounting is recommended as an alternative to functional‐currency accounting. The information generated by the multi‐currency versus the functional currency (as advocated in the SFAS 133) accounting methods for using options as hedging instruments is illustrated. Multi‐currency accounting excels in its transparency. It more clearly provides information on the respective exposure positions of the hedged items and the hedging instruments as well as the notional amounts. Auditors’ risk assessment and analysis can now be effectively performed under this system.
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This paper outlines the theoretical models of international cash management and assesses their implications for corporate practice. Corporate practice is then reviewed through the…
Abstract
This paper outlines the theoretical models of international cash management and assesses their implications for corporate practice. Corporate practice is then reviewed through the analysis of survey research and case studies. It emerges that whilst the implications of theoretical models are captured in essence by corporate practice, there is scant evidence of companies using sophisticated models in international cash management. The practice of international cash management is largely driven by developments in communications and computer technology, relaxation of regulatory and tax impediments, the internationalisation of banking and the development of new banking prod ucts. International treasurers may therefore be able to find appropriate cash management solutions to meet their business needs with the co‐operation of banks and technology providers. Further academic research should evaluate the extent to which corporate practice is consistent with extant multi‐currency balance and net work optimisation models and also explain why particular approaches to interna tional cash management persist in companies.
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The author takes one example of product development, the introduction by Midland Bank in 1982 of its International Cash Management Service, in order to highlight the way that a…
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The author takes one example of product development, the introduction by Midland Bank in 1982 of its International Cash Management Service, in order to highlight the way that a new product may in practice be brought to the market.
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Robert Fiedler, Karl Brown and James Moloney
Advanced software and hardware solutions are enabling institutions to progress from traditional asset liability management to earnings sensitivity and future market valuation…
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Advanced software and hardware solutions are enabling institutions to progress from traditional asset liability management to earnings sensitivity and future market valuation across dynamically modelled balance sheets. By implementing pre‐defined management trading strategies across scenarios and through time for the portfolio, firms can not only protect themselves from risk, but also actively manage short‐term earnings against long‐term value and enhance their net worth.
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Since the abandonment of the multi-currency regime in June, the new Zimbabwe dollar has lost almost 60% of its value relative to the US dollar. The parallel market for foreign…
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DOI: 10.1108/OXAN-DB246811
ISSN: 2633-304X
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It is the purpose of this article to empirically test the risk parameters for larger foreign‐exchange portfolios and to suggest real‐world policies and procedures for the…
Abstract
Purpose
It is the purpose of this article to empirically test the risk parameters for larger foreign‐exchange portfolios and to suggest real‐world policies and procedures for the management of market risk with the aid of value at risk (VaR) methodology. The aim of this article is to fill a void in the foreign‐exchange risk management literature and particularly for large portfolios that consist of long and short positions of multi‐currencies of numerous developed and emerging economies.
Design/methodology/approach
In this article, a constructive approach for the management of risk exposure of foreign‐exchange securities is demonstrated, which takes into account proper adjustments for the illiquidity of both long and short trading/investment positions. The approach is based on the renowned concept of VaR along with the innovation of a software tool utilizing matrix‐algebra and other optimization techniques. Real‐world examples and reports of foreign‐exchange risk management are presented for a sample of 40 distinctive countries.
Findings
A number of realistic case studies are achieved with the objective of setting‐up a practical framework for market risk measurement, management and control reports, in addition to the inception of a practical procedure for the calculation of optimum VaR limits structure. The attainment of the risk management techniques is assessed for both long and short proprietary trading and/or active investment positions.
Practical implications
The main contribution of this article is the introduction of a practical risk approach to managing foreign‐exchange exposure in large proprietary trading and active investment portfolios. Key foreign‐exchange risk management methods, rules and procedures that financial entities, regulators and policymakers should consider in setting‐up their foreign‐exchange risk management objectives are examined and adapted to the specific needs of a model of 40 distinctive economies.
Originality/value
Although a substantial literature has examined the statistical and economic meaning of VaR models, this article provides real‐world techniques and optimum asset allocation strategies for large foreign‐exchange portfolios in emerging and developed financial markets. This is with the objective of setting‐up the basis of a methodology/procedure for the measurement, management and control of foreign‐exchange exposures in the day‐to‐day trading and/or asset management operations.
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After a month of fuel protests and a violent military crackdown, Mangudya on February 20 effectively acknowledged Zimbabwean bond notes and electronic RTGS bank balances as part…
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DOI: 10.1108/OXAN-DB242426
ISSN: 2633-304X
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Geographic
Topical
Speculates on the product of “digital money” from the perspectives of consumers, merchants and banks in ten years time. Predicts that convenience of access for consumers to…
Abstract
Speculates on the product of “digital money” from the perspectives of consumers, merchants and banks in ten years time. Predicts that convenience of access for consumers to electronic cash will mean that interactive television, PCs in the office and two‐slot mobile phones will all have become personal mobile cash dispensers for e‐cash. Argues that stakeholder analysis bears out the fact that digital money does have a future and sees a healthy competitive market of e‐cash contenders developing. Considers the opportunities and challenges presented by technology from a banker’s perspective and based on NatWest’s early experiences suggests that Mondex, with its global multi‐currency infrastructure, its transferable nature and support of banks in 60 countries is likely to become the market leader.
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Describes the effects which the move towards the single market hashad on European manufacturing and distribution as companies are giventhe opportunity to standardize products and…
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Describes the effects which the move towards the single market has had on European manufacturing and distribution as companies are given the opportunity to standardize products and business processes across Europe. Considers the role of logistics and IT, inventory planning and control. Discusses the accelerating competition, the potential benefits and the high costs of failure involved in the significant opportunities presented by the European enterprise. Includes two case studies.
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Leverick, Head of Balance Sheet Management for the Royal Bank of Scotland and a stalwart of the Asset and Liability Management Association, takes a look at the latest situation in…
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Leverick, Head of Balance Sheet Management for the Royal Bank of Scotland and a stalwart of the Asset and Liability Management Association, takes a look at the latest situation in the efforts to provide regulation that is intended to bring order to liquidity.
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