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Article: Managing the black ink and red flags of FX: quantifying foreign exchange risk is harder than you think.(COMPETITIVE EDGE)
- Article from:
- Directors & Boards
- Article date:
- January 1, 2008
- Author:
CopyrightCOPYRIGHT 2008 Directors and Boards. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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AS A BOARD MEMBER of a multinational corporation, are you being told that the weak dollar has resulted in increased corporate revenues and profits?
Today, the multitude of risks associated with foreign exchange exposure has largely been masked by the long-term decline of the U.S. dollar relative to other major currencies. Rather than highlighting flaws in accounting and foreign exchange exposure management processes, U.S. multinationals have regarded these surprises as a "gift."
In reality, no surprise is a good surprise when you are talking about accounting practices. While windfalls from the weak dollar have allowed many CFOs to cast a blind eye to ...