Currency changeover effects on business management in the EU

Abstract

The euro’s introduction initially confronts a firm with a currency changeover problem affecting its accounting and reporting systems. The company’s controller can solve this initial problem by means of an electronic data processing project. For the project’s duration, it is crucial to maintain reporting transparency by providing for successive transition of accounting subsystems from the national currency to the euro. Yet, with barely six months remaining until national currencies cease to be legal tender, few firms have prepared their accounting systems for conversion to the euro. Moreover, switching currencies constitutes just a small part of a far larger, complex set of related problems. That is because the common currency’s introduction also influences many business parameters of differing importance to management. Generalized checklists help managers little in dealing with the specific impacts such influences may have on an enterprise. Accordingly, the controller must identify the relative importance and sequence of changes necessary in each of the firm’s functional areas. The euro’s introduction furthermore represents an opportunity for management to modernize the company’s IT structures and to start using both the Internet and data warehouses.

Citation

Rickards, R.C. (2003), "Currency changeover effects on business management in the EU", European Business Review, Vol. 15 No. 1, pp. 20-28. https://doi.org/10.1108/09555340310455164