Forecasting in Austrian companies

Peter Hofer, Christoph Eisl and Albert Mayr

Journal of Applied Accounting Research, 2015, vol. 16, issue 3, 359-382

Abstract: Purpose - – The purpose of this paper is a comparison of forecasting behaviour of small and large Austrian firms, analysing their forecast practices in a volatile business environment. Design/methodology/approach - – The empirical analysis of the paper, deductive by nature, was conducted by means of a quantitative online-survey (199 data sets). The relationship of perceived volatility and forecast predictability was evaluated by correlation analysis.t-Test and analysis of variances were used to examine significant differences in the forecast characteristics between small and large Austrian companies and different industries. Findings - – The study provides evidence that the surveyed companies have been hit by volatility, showing that Austrian SMEs are significantly more severely affected than large companies. The increasing volatility correlates with a reduced forecast predictability of sales quantities and commodity prices. Large Austrian companies primarily use a broad spectrum of qualitative forecasting methods. In contrast, Austrian SMEs utilize simple quantitative and qualitative forecast techniques, like the forward projection of historical data. Research limitations/implications - – Relevant for the forecasting of small and large companies. Practical implications - – Although management requests a broad spectrum of forecast qualities, the current usage of less sophisticated methods reveals a gap between intention and reality. Companies that supplement their qualitative techniques by sophisticated quantitative ones should expect less forecast bias. Originality/value - – This paper initially compares forecast methods in large and small Austrian firms and additionally provides the impact of volatility on the forecast predictability.

Keywords: Management accounting; Finance; Risk management; International accounting (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaarpp:v:16:y:2015:i:3:p:359-382

DOI: 10.1108/JAAR-10-2014-0113

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