Hendieh and Poulton Publish Collaborative Paper

In a collaborative research, Assistant Professor of Accounting Jacques Hendieh, DBA, and Professor of Economics Robert Poulton, PhD, of the C.H. Sandage School of Business examined the “Impact of hyperinflation on financial statements and taxation: a case of Lebanon”.

Their paper is published in the International Journal of Accounting, Auditing and Performance Evaluation.

Title
Impact of Hyperinflation on Financial Statements and Taxation: a Case of Lebanon
Authors
Jacques Hendieh, Robert Poulton, Umair Riaz
Abstract
Since 2019, the Lebanese currency has continued to devalue against the US dollar. We aim to discuss two improvements in the present study, the impact of using a fixed exchange rate on import taxes during hyperinflation in a developing country. We also tested whether IAS29 will result in more reliable, relevant financial statements. We collected annual reports from the Lebanese Central Bank and Procter and Gamble. Two techniques were used to test the hypotheses: a descriptive approach and a simple regression model. We find that using a market exchange rate instead of a fixed exchange rate is better for improving import tax collections, especially in hyperinflation times, when governments must spend more to reduce their expenditures to limit the impact of inflation. Our results also suggest that using IAS29 results in more reliable and relevant financial statements that improve the decision-making process for the stakeholders and the company’s survival chances.

In the International Journal of Accounting, Auditing and Performance Evaluation