Role of Securities & Derivatives & Accounting information systems

Accounting can be considered as trade language that is used for communications. In the past, accounting was used to identify, measure, record, classify, adopt, and report of financial transactions. But, by progress of technology, accounting is an important control, planning, and decision-making tool today. Thus, there are large changes in views toward accounting, which the most important one is "accounting as an information system As well as Firms are exposed to several risks in the ordinary course of operations and when borrowing funds. For some risks, management can obtain protection from an insurance company. There are capital market products available to management to protect against certain risks that are not insurable by an insurance company. The instruments that can be used to provide such protection are called derivative instruments, so named because they derive their value from whatever the contract is based on. These instruments include futures contracts, forward contracts, option contracts, swap agreements, and cap and floor agreements. There has been public concern about the use of derivative instruments by firms.

Autorentext

Iman Zare- faculty member of the payame Noor University , I.R. of IRAN- Department of Accounting