The Extent of Verification Financial Reporting Requirements for Hedging Activities on Exchange Rates

(( A Comparative Analytical Study and A Suggested Framework ))

A Thesis Submitted to the Board of the College of Administration and Economics/University of Karbala
As Partial Fulfillment of the Requirements for the Master Degree Science in Accounting

By
Alaa Rida M.Alghninmi
Supervised by
Prof. Dr. Hayder Ali Al-Masoudi

Abstract:

The exchange rate is the true economic face of any country. With the expansion of global markets and modern technology, the search for economic units at lower cost and new customers, and the shift to free markets and flexible exchange rates have increased the risks in the overall economic environment, especially the risks arising from foreign exchange fluctuations, Prompting the economic units to look for ways to avoid these risks. Derivative financial instruments emerged as tools to manage, avoid or limit these risks. Given the importance of these instruments and their high degree of exposure, the International Financial Reporting Standards Board.
This study seeks to highlight the international financial reporting requirements for exchange rate hedging activities, as well as the exchange rate and risks arising from the exchange rate hedging activities. And the tools most used to hedge against these fluctuations. In order to determine the extent to which the financial reporting requirements for the exchange rate hedging activities of the Iraqi economic units have been met, the researcher has relied on taking a sample from an Iraqi, Arab and foreign economic unit by comparing Analyzing the extent to which these economic units applied to the financial reporting requirements for exchange hedging activities, which concluded that Iraqi economic units did not adopt international accounting and financial reporting standards, particularly the reporting standards for foreign currency hedging activities, The international financial reporting on exchange rate hedging activities in accordance with the Iraqi accounting systems, and urged the competent accounting authorities in Iraq to apply, as well as the researcher found the need to apply hedge accounting because of the positive effects in Financial reporting hedging activities, which will affect the quality and fairness of the financial reports of the Iraqi economic units, especially financial institutions, companies and financial transfer.