INFLATION IS UNDER CONTROL AND DOES NOT EXERT ANY IMPACT ON BUSINESS DECISIONS. IS IT TRUE?
DOI:
https://doi.org/10.11606/rco.v10i28.121940Keywords:
Monetary Correction, Inflation, Decision-Making, Financial Statements.Abstract
This case study presents a situation in which the reader is led to reflect on the impact of inflation on Financial Statements. The central character of the case in question is Antônio Morais, a successful businessman, who, after purchasing a midsize business, has tried to “meet” his new venture, starting with detailed analysis of Financial Statements as well as precise meetings with the Department of Accounting for further information. Antônio understood that there was room to further expand his new business, but to do so, he needed reliable information to support his decisions. Then, the manager decided to hire a Public Accounting to analyze the Financial Statements of the company, and received a preliminary report of the Auditor, stating they did not contemplate, through the inflation adjustment, the effects of the loss of purchasing power of the country’s currency (inflation). The case seeks to propitiate a reflection on the impacts of inflation on Financial Statements, thus promoting the opportunity to explore concepts and correlate them with the practice. This study can be used in Undergraduate Programs in Business and Accounting, specifically in the subjects of Stock Accounting, Analysis of Financial Statements, and Financial Management.
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