The analysis of the effects of and the role of exchange rates on the quality and preparation of financial statements of companies listed on the Zimbabwe Stock Exchange.

Author

Balami, Panashe

Title

The analysis of the effects of and the role of exchange rates on the quality and preparation of financial statements of companies listed on the Zimbabwe Stock Exchange.

Abstract

This research study was carried out to examine the impact of monetary policy on the production of financial statements by firms listed on the Zimbabwe Stock Exchange (ZSE) from 2019 to 2022. The study was initiated due to the decline in the quality of financial statements being generated by these companies. The research reviewed prior literature on the subject to establish the opinions of other authors and areas where there was a lack of information. A combination of descriptive correlation and mixed-methods research was utilized to collect primary and secondary data from a sample of 60 respondents, with 20 respondents from each firm. Data was presented and analyzed using charts, graphs, and tables. The investigation discovered that the three companies under review (OK Zimbabwe, Delta, and Powerspeed Electrical) were experiencing challenges implementing the Reserve Bank of Zimbabwe's (RBZ) monetary policies, which jeopardized their ability to continue as going concerns and had a negative impact on financial statement preparation and reporting. By utilizing linear regression analysis and data collected from secondary sources and the International Monetary Fund (IMF), the study established a direct relationship between monetary policy tools and financial statements, particularly with regard to total assets. Additionally, the research revealed that currency fluctuations resulting from changes in monetary policy had a significant effect on the financial statements of firms operating in Zimbabwe, leading to significant losses in some cases. Based on these findings, recommendations were made to improve the financial statement preparation and reporting processes, including the adoption of more robust risk management strategies by companies to mitigate the effects of currency fluctuations.

Date

2023

Publisher

BUSE

Keywords

Monetary policy

Financial statement

Supervisor

N/A

Item sets

Department of Accountancy

Media

The analysis of the effects of and the role of exchange rates on the quality and preparation of financial statements of companies listed on the Zimbabwe Stock Exchange.

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