THE EFFECT OF THE CHANGE IN THE EXCHANGE RATE ON THE FINANCIAL STATEMENTS A FIELD STUDY ON, INDUSTRIAL COMPANIES IN HADHRAMOUT GOVERNORATE

Abstract

This study aimed to know the extent to which the financial statements are affected by changes in exchange rates, and to know the effect of the change in prices on both sales and the balance sheet, as well as studying the effect of changes in exchange rates on historical cost accounting. The study sample consisted of (60) owners, financial managers, accountants and auditors in industrial companies located in Hadhramout governorate in Yemen. To achieve the objectives of the study, the descriptive analytical method was used in addition to a questionnaire that the researchers distributed, which included (20) statements whose validity and reliability were confirmed. Then The data was processed and hypotheses were tested using the Statistical Package for the Social Sciences (SPSS) program. This study concluded that: the financial statements are affected by exchange rate changes, that changes in prices affect both sales and the balance sheet, and that the financial statements prepared according to the historical cost basis in periods of high levels the general definition of prices is misleading and dishonest. The researchers recommended the need to take into account changes in exchange rates that negatively affect the financial statements and reports, as well as developing some accounting principles and concepts used in traditional accounting measurement. To adapt to changes in the price level.