Accounting Perceptions on Hedging Currency Risks: From Theory to Practice

Paper offers an accounting perspective to hedging currency risk from both a theoretical and practical perspective. From the theoretical point of view we first position the study by considering historical developments of accounting research literature. Furthermore, we mainly look at currency hedging techniques being established through trade literature and practice while developing an overview of research literature. On the other hand, there are also analyzed the use of techniques for hedging currency risk in practice. The employed research methodology includes literature review specific methods. The objective of this paper is to document the necessity of developing an adequate system of surveillance and control measures imposed through the certainty of currency risk itself. The purpose and benefit in developing such a system as a component of sound corporate governance policies would be to limit companies' exposure to currency risk.