Financial Risk Management Practices in Financial and Non-Financial Firms; Survey of Pakistani Firms

Abstract

The study aims to explore risk management practices used by financial and non-financial firms of Pakistan. Self-reported questionnaires were distributed using convenience sampling method among financial and non-financial firms. The results indicate that non-financial firms used risk management practices but the percentage is low as compared to financial firms. Firms engaged in international trade used risk management practices and followed the procedure needed for evaluating and managing risk. Although these firms have a small portion of operating revenue and operating cost in foreign currencies. The financial managers of these firms make risk reports to their top managers as per their policies and requirement. New FASB rules also affect their derivatives usage.