All firms have income statements and balance sheets; and these financial documents reflect the valuation of all the assets and liabilities of the company. It is important to know that every change or mistake in every financial report can represent capital losses and can potentially cause the company to fail.
Changes and mistakes in the assets and liabilities statements are just some of the problems in international businesses. The inconsistency of exchange rates; it can actually affect the company performance and cause financial losses for the parent company. Thus, reports about assets and liabilities in foreign operations must be translated into the language of the home country. These financial translations should be accurate and thus be an accurate reflection of what is the current economy situation of the foreign subsidiary is.
Both firms and translators should remember that there are complexities and risks when it comes to financial translation. Inappropriate financial translation may have a negative impact both on the business and on the translator. It should be noted that choosing the right and professional financial translator is highly important and desirable.
It should be noted that all international firms are in some way influenced by three financial factors, exchange rates, interest rates, and commodity prices. Translating financial statements doesnt only involve the assets of the company but also all these factors that may affect the business.
There are several risks involved in translating financial statements; improper financial translation such as for interest rates, exchange rates, and commodity rates may lead to potential capital losses. Thus, financial translators should know about the risks that may arise if accuracy and efficiency of translation is neglected.
Financial translation risk is complex and often results in affecting the financial condition of the parent company and trigger capital losses for the company. Most firms are aware about transaction currency risk; however few are aware of the potential danger of financial translation risk.
Translation risk is a crucial issue in the business world, and thus, it should be noted that accurate financial translation is vital significant to the success and expansion of the company; and hiring a professional and knowledgeable financial translator is therefore a crucial decision that every international company should give importance to.
Financial translators should possess an excellent educational qualification and a wide experience in the financial industry. Professional translators have capabilities in translating across wide areas in the financial industry, such as audit reports, exchange rates, interest rates documents, and liabilities reports of the company. In addition, skillful financial translators should not only possess a knowledge of the financial industry but should also have a high linguistic proficiency in the target language.
