Introduction to Foreign Currency and Exchange Rates
We know accurately only when we know little; with knowledge doubt increases.1
—Johann Wolfgang von Goethe, Sprüche in Prosa2
WHO YOU ARE
You are anyone in an organization working with multicurrency financial information—anyone from the chief executive officer, the chief financial officer, or the chief information officer to the manager, the computer programmer, the financial analyst, or the general ledger accountant. The world economy requires you, a citizen of the world, to have a fundamental working knowledge and awareness of the topics.
You may require depth in a particular topic area, but breadth of knowledge remains essential to success. You need an understanding of concepts and practical applications across domains, whether as a user or a preparer of financial information. That requisite understanding ignores any hierarchical or departmental boundaries. Those individuals who cling to such boundaries as a justification or defense risk obsolescence.
To not know and understand is to be in denial; to know and understand requires individual effort.
WHAT YOU KNOW
In a multicurrency environment, you sit at the complex intersection of economics, currency markets, mathematics, official financial reporting standards, management reporting, computer science, and governmental fiscal and monetary policy. A company could swing from profit to loss without a single change in operations, simply by the movement of exchange rates. Further, ...